- (1.) IN the Ref. Petn. Nos. 37 of 1988, 38 of 1988 and 42 of 1988, at the instance of the assessee, the Tribunal has referred the following question for opinion of this Court: Whether on the facts and in the circumstances of the case, the Tribunal was right in law in holding that assessee is not an industrial company within the meaning of definition used in Section 2(7)(c) of the Finance Act, 1978 for the purpose of lower rate of tax ?
(2.) IN the Ref. Petn. Nos. 39 of 1988, 40 of 1988 and 41 of 1988, at the instance of the revenue, the Tribunal has referred the following questions for opinion of this Court: (i) Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that hotel business is an industrial undertaking covered within the meaning of Section 32A of the Income Tax Act ? (ii) Whether on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the hotel building is plant for allowance of depreciation at higher rate ?. The assessee is a private limited company carrying on hotel business at Jaipur known as Ram Bagh Palace Hotels (P) Ltd. The assessee claimed before the Income Tax Officer that the assessee company should be treated as an industrial company/undertaking entitled to the benefits arising out of it. The Income Tax Officer did not accept the plea of the assessee. On appeal before the Commissioner (Appeals), the view of the Income Tax Officer came to be confirmed. The assessee further went in appeal before the Tribunal. Before the Tribunal, the judgment of the Kerala High Court in CIT v. Casino (P) Ltd. : (1973) 91 ITR 289 (Ker) was relied upon which weighed with the Tribunal and the Tribunal held that the assessee does a hotel business which is nothing but production of articles and there is no difference between production of article and processing of goods and recorded the findings in favour of the assessee. The reference has arisen under these circumstances.
(3.) THE first question is, whether the Tribunal was justified in holding that the assessee is an industrial company in terms of Section 2(7)(c) of the Finance Act, 1973 (sic). This issue came for consideration before the Bombay High Court in case title CIT v. Berrys Hotels (P) Ltd. : (1994) 207 ITR 615 (Bom). Dealing with this, the court observed as under: It seems clear to us that the Tribunals view cannot be sustained since the words used in the definition will have to be interpreted contextually always keeping the purpose of the enactment in view. The Finance Act, 1973, gives the definition of the term industrial company thus: Industrial company means a company which is mainly engaged in the business of generation or distribution of electricity or any other form of power or in construction of ships or in the manufacture or processing of goods or in mining. The clear object of the Act was to give concession in the rate of income -tax to manufacturing concerns. The concession was not intended to be given to trading concerns. The activity carried on by the assessee indicates that it essentially belonged to the latter category. It carries on trading activity. The Tribunal gave a wide meaning to the word processing used in the definition on the basis of Asstt. CIT v. Farrukhabad Cold Storage (P) Ltd. : (1977) 107 ITR 816 (All), and, only on that basis, upheld the assessees contention. In the first place, it may be mentioned that the said decision of the Allahabad High Court has been expressly overruled by the Supreme Court in the case of Delhi Cold Storage (P) Ltd. v. CIT : (1991) 191 ITR 656 (SC). Thus, the very basis for the Tribunals view no more exists. But that factor is not decisive of the matter: It is true that such activity has been held to be manufacturing process as defined under Section 2(k) of the Factories Act. But, it is a well known canon of interpretation of statutes that the meaning given to the words in one statute cannot be automatically imported for interpretation in another statute. All depends upon the purpose of the Act and the context in which the words appear.;