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 s. 104 4 since the income attributable to such activity was less than 51 per cent of its total income.
It owns a tannery known as Southern India Tanneries where the tanning of hides and skins by chemical process is done.
14th November, 1978 in Tax Case No.
During the asst.
33 of 1975 reported as India Leather Corporation vs. CIT 1989 179 ITR 181 Mad relating to the asst.
He, therefore, levied additional tax of Rs.
32,49,000 only.
The Tribunal has observed that the sales of goods manufactured by the assessee was less than 10 per cent of the total export and that the rest were all goods of third parties, purchased and exported by it on companymission basis.
BY THE COURT This appeal by the assessee is directed against the judgment of the Madras High Court dt.
3,73,870 obtained by the assessee during the relevant previous year by the sale of chemicals imported by it on the strength of licences issued to it based on its export performance of leather both manufactured and purchased by it was rightly held as number attributable to the manufacturing activity carried on by it.
1,00,000 as dividend.
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 distributable income of the assessee for the assessment year in question was Rs.
The High Court granted certificate of fitness for appeal to this Court under s. 261 of the Act in view of the decision of this Court in Cambay Electric Supply Industrial Co. Ltd. vs. CIT 1978 113 ITR 84 SC Hence this appeal.
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 s. 104 of the IT Act, 1961 hereinafter referred to as the Act do number apply in view of sub s. 4 of s. 104.
By the impugned judgment the High Court has answered the said question in the affirmative, i.e., against the assessee and in favour of the Revenue.
1966 67 the total profit of the assessee was Rs.
The said order of the ITO was affirmed in appeal by the AAC and by the Income tax Appellate Tribunal hereinafter referred to as the Tribunal on further appeal.
58,937 under s. 104.
