COMMISSIONER OF INCOME TAX Vs. CALTEX INDIA LTD

JUDGEMENT

(1.) THIS is a reference under S. 256 (1) of the IT Act, 1961, and it is made at the instance of the Revenue. It raises the following question :

(2.) THE reference concerns the asst. yrs. 1967-68 to 1972-73. The main business of the assessee was the distribution of petroleum products. It was also engaged in the blending of various grades of lubricating oil. In regard to the activity of blending, the assessee claimed that it was a priority industry and was covered by the provisions of ss. 80E and 80-1 and S. 33(1)(b)(B)(i) of the IT Act, 1961. The ITO declined to give the assessee the benefits contemplated by the aforesaid sections and his order was confirmed in appeal. The Tribunal, however, upheld the assessee's contention in further appeal.

(3.) IT was found as a fact that the assessee acquired imported or locally procured straight mineral base oil and pumped it through a blending machine at certain specified temperatures along with certain additives, in the form of some 18 chemicals and different dyes, various vegetable-based oils and silicones in required proportions. The end-product was the lubricating oil, in different grades which, according to the assessee, was mineral oil for the purposes of the said item (3).