Law:

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Section 2(7)(C) of the Finance Act, 1973 - Industrial company - Assessment year 1973-74 - Whether assessee-company running a cold storage could be said to be engaged in processing of goods so as to be treated as 'industrial company' within meaning of section 2(7)(c) - Held, no FACTS The assessee-company, running a cold storage, claimed that the activity carried on by it came within the words 'processing of goods' within the meaning of section 2(7)(c) and was thus, an industrial company within the meaning of that' section. Though the ITO did not accept the claim, the AAC, on appeal, conceded the claim. On further appeal, by the revenue, the Tribunal, however, held that the assessee was not an 'industrial company'. On reference, the High Court also upheld the Tribunal's order. On appeal: HELD Processing is a term of wide amplitude and has various aspects and meanings. In common parlance 'processing' is understood as an action which brings forth some change or alteration of the goods or material which is subjected to the act of processing. The dictionary meaning of the term is not very different from this meaning in one sense while various other meanings of wider amplitude are also available. Processing involves bringing into existence a different substance from what the material was at the commencement of the process. In a cold storage, vegetables, fruits and several other articles which require preservation by refrigeration are stored. While as a result of long storage, scientific examination might indicate loss of moisture content that is not sufficient for holding that the stored articles have undergone a process within the meaning of section 2(7)( c). Accordingly, the order of the High Court, in the present case, was to be upheld. CASE REVIEW ddl. CIT v. Farrukhabad Cold Storage (P.) Ltd.[1977] 107 ITR 816 (All.) and CIT v. Radha Nagar Cold Storage (P.) Ltd.[1980] 126 ITR 66 (Cal.) reversed. Chowgule and Co. (P.) Ltd. v. Union of India [1981] 47 STC 124 (SC) followed and relied upon. Decision of the Delhi High Court in Delhi Cold Storage (P.) Ltd. v. CIT [1985] 156 ITR 97affirmed. CASES REFERRED TO CIT v. Radha Nagar Cold Storage (P.) Ltd.[1980] 126 ITR 66…

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