Kerala H.C : Whether, on the facts and in the circumstances of the case, the Tribunal was legally correct in holding that the assessee-company was not an ‘industrial company’ within the meaning of s. 2(7) (c) of the Finance Act, 1979 ?

Counsel Appeared

M. Pathrose Mathai & Joseph Vellappally, for the Petitioner : P.K.R. Menon & N.R.K. Nair, for the Respondent

K.S. PARIPOORNAN, J.:

The petitioner is a private limited company. It is an assessee to income-tax. It is carrying on the business of running a hotel. The respondent is the Revenue. For the asst. yr. 1979-80, the ITO determined the balance taxable income of the petitioner at Rs. 56,700. He levied incometax at the rate of 65per cent under Paragraph E, cl. 2(ii) of the First Schedule to the Finance Act, 1979. The plea of the petitioner that they could be taxed only at the lower rate of 55per cent under Paragraph E, cl. 2(i)(a) as an industrial company as defined in s. 2(7)(c) of the said Finance Act, was negatived. The CIT (Appeals), as also the Tribunal, affirmed the said decision. They followed the decision of the earlier Division Bench of this Court in CIT vs. Casino (P) Ltd. (1973) 91 ITR 289 (Ker) and held that the petitioner is not an industrial company entitled to the lower rate of tax. The petition, filed under s. 256(1) of the IT Act to refer a question of law formulated by the petitioner, was rejected. The assessee has filed this petition under s. 256(2) of the Act. He prays that the Tribunal may be directed to refer the following question of law for the decision of this Court :

” Whether, on the facts and in the circumstances of the case, the Tribunal was legally correct in holding that the assessee-company was not an ‘industrial company’ within the meaning of s. 2(7) (c) of the Finance Act, 1979 ?”

We heard counsel for the petitioner, Mr. Vellappally, as also counsel for the Revenue. It is agreed that the Division Bench decision of this Court in Casino (P) Ltd.’scase (supra) squarely applies to this case. But it was argued that the said decision requires reconsideration in view of the later decisions of Courts. Our attention was not invited to any decision which has taken a different or has dissented from the decision of this Court in Casino Ltd.’s case (supra). On the other hand, a Division Bench of the Madras High Court in CIT vs. Buhari Sons (P) Ltd. (1983) 144 ITR 12 (Mad) has applied the dictum laid down by this Court in Casino (Pvt.) Ltd.’s case (supra) and held that a hotel is not an industrial company. The question posed for consideration is fully covered by the Division Bench decision of this Court in Casino (Pvt.) Ltd.’s case (supra) which was followed by another Division Bench of the Madras High Court in Buhari Sons (P) Ltd.’s case (supra). We fully concur with the, said decisions.

In this view of the matter, we do not find any reason to direct the Tribunal to refer the question of law formulated by the petitioner (quoted above) for the decision of this Court. This original petition is dismissed.

[Citation : 170 ITR 419]