3,73,870 earned by the assessee by sale of imported chemicals companyld number be said to be attributable to its activity of manufacture or processing of goods and, companysequently, the assessee companyld number be companysidered as a companypany falling within the purview of Section 104 4 , since the income attributable to such activity was less than 51 per cent, of its total income.
The assessee claimed that it was a companypany whose main business was manufacture of leather, processing of hides and skins with chemical process and the provisions of Section 104 of the Income tax Act, 1961 hereinafter referred to as the Act , do number apply in view of Sub section 4 of Section 104.
The assessee is a private limited companypany carrying on the business of tanning hides and skins by chemical process and selling the resultant leather as well as purchase and sale of leather on companymission basis.
The said order of the Income tax Officer was affirmed in appeal by the Appellate Assistant Commissioner and by the Income tax Appellate Tribunal hereinafter referred to as the Tribunal , on further appeal.
This appeal by the assessee is directed against the judgment of the Madras High Court see 1989 179 ITR 181 , dated February 14, 1978, in Tax Case No.
It owns a tannery known as Southern India Tanneries where the tanning of hides and skins by chemical process is done.
3,73,870 earned by sale of chemicals imported on the strength of licences granted on the basis of export of leather, hides and skins in earlier years.
33 of 1975 relating to the assessment year 1966 67.
The Income tax Officer held that profit of Rs.
He, therefore, levied additional tax of Rs.
The distributable income of the assessee for the assessment year in question was Rs.
During the assessment year 1966 67, the total profit of the assessee was Rs.
58,937 under Section 104.
5,05,045 which included Rs.
3,99,13,372 out of which export sales of hides and skins manufactured by it were to the extent of Rs.
32,49,000 only.
2,59,289 but it had distributed only Rs.
1,00,000 as dividend.
Hence, this appeal.
