The act of cold storage, whereby foods or products are prevented from their natural decay, constitutes processing of goods within the meaning of the relevant Finance Acts.

( 1 ) IN this reference under Section 256 (1) of the I. T. Act, 1961, the following question has been referred to this court:"whether, on the facts and in the circumstances of the case, the Tribunal was correct in holding that the assessee-company was engaged in the processing of goods and was accordingly an industrial company within the meaning of Section 2 (6) (d) of the Finance Act, 1968, or under Section 2 (6) (c) of the Finance Act, 1969 ?"

( 2 ) THE assessee-company has been engaged in the business of running a cold storage plant. Its income consists of charges collected from the growers of the potato for allowing them to store their products inside the assessee's plant in order to preserve these from perishing and keeping them in marketable condition. In this reference, we are concerned with the assessment years 1968-69 and 1969-70. For these two assessment years, the ITO had levied tax at 65% on the basis that the assessee was not an industrial company within the meaning of the relevant Finance Acts.

( 3 ) THE assessee preferred appeals before the AAC. The AAC held that the assessee-company operated a cold storage plant which was used for conservation of perishable goods deposited by the customers. Such activity, according to the AAC, fell within the meaning of processing of goods. The AAC also sought support for his conclusion from the reference to Section 80j (1) and Section 80j (4) of the I. T. Act, 1961. For the aforesaid reasons, the AAC directed the ITO to treat the assessee-company as an industrial company engaged in the processing of goods and charge income-tax at the rate of 55%.

( 4 ) BEING aggrieved by the orders of the AAC, the revenue preferred appeals before the Tribunal. The Tribunal was unable to accept the point made by the AAC that support could be had from the language used in Section 80j of the I. T. Act, 1961, in construing the provisions of the Finance Acts concerned. According to the Tribunal, it was not proper, when the relevant Finance Act contains its own definition, to seek support from other Acts even though the Legislature had not tried to define the expression "processing" as such. After having held as aforesaid, the Tribunal considered the question whether the assessee-company was an industrial company. The Tribunal negatived the contention urged on behalf of the assessee that the assessee-company was also a company which came within the definition of industrial company because it generated power in the act of cold storage. The Tribunal, however, was of the view that preventing changes by storing goods in the cold storage the assessee-company was engaged in the activity of processing and as such came within the definition of an industrial company under the relevant Finance Acts. The Tribunal, therefore, on this ground dismissed the revenue's appeal before the Tribunal. Upon this, the Tribunal has referred to this court the question as mentioned hereinbefore.

( 5 ) BEFORE we consider the question further it may be necessary to refer to the definition of the relevant Finance Act, namely, the Finance Act, 1968. Section 2 (6), Clause (d), defined "industrial company" as follows :" '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 the construction of ships or in the manufacture or processing of goods or in mining. Explanation.--For the purposes of this clause, a company shall be deemed to be mainly engaged in the business of generation or distribution of electricity or any other form of power or in the construction of ships or in the manufacture or processing of goods or in mining, if the income attributable to any one or more of the aforesaid activities included in its total income of the previous year (as computed before making any deduction under Chapter VI-A of the Income-tax Act) is not less than fifty-one per cent. of such total income. "

( 6 ) SIMILAR defi