DELHI COLD STORAGE PVT. LTD. versus COMMISSIONER OF INCOME TAX, DELHI-I, NEW DELHI.

Citation: [1991] 3 S.C.R. 589 · Decided: 14-08-1991 · Supreme Court of India · Bench: RANGANATH MISRA · Disposal: Dismissed
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Judgment (excerpt)

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DELHI COLD STORAGE PVT. LTD. 
A 
v. 
COMMISSIONER OF INCOME.TAX, DELHI-I, NEW DELHI. 
AUGUST 14, 1991 
[RANGANATH MISRA, CJ., M.H. KANIA AND 
B 
KULDIP SINGH, JJ.] 
Finance Act, 1973: Section 2(7)(c)-Assessee running a cold 
storage-Whether an 'Industrial company'-Activities of cold storage 
-Whether involve processing of goods. · 
Words and Phrases-Word 'Processing'-Meaning of. 
An ~Industrial Company', as defined in Section 2(7)(c) of Finance 
Act, 1973 was entitled to certain concessions in the matter of taxation. 
c 
The appellant, a private limited company running a cold storage, laid 
claim to such benefits contending that it came within the meaning of D 
'industrial company' since the activity carried. on by it came within the 
words 'processing of goods'. 
The Income-Tax Officer rejected the assessee's claim but the 
Appellate Assistant Commissioner conceded the claim, and directed 
remission of the proceedings to the Income-Tax Officer for re-computa-
E 
lion of the tax by treating the appellant as an 'industrial company'. The 
Tribunal accepted the appeal of the Revenue and held that the appellant 
was not an 'industrial company'. This was upheld by the High Court. 
Dismissing the appeal preferred by the assessee, this Court, 
HELD: I.I The term 'processing' is of a wider 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 
F 
in one sense while various other meanings of wider amplitude are also G 
available. [593G-H, 594A] 
1.2 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 
H 
589 
.I 
A 
590 
SUPREME COURT REPORTS 
[1991] 3 S.C.R. 
undergone a process within the meaning of Sec. 2(7)(c) of the Finance 
Act, 1973. [594C] 
Chowgule & Co. Pvt. Ltd. and Anr. v. Union of India & Ors., 
[1981] 1sec653, relied on. 
B 
Commissioner of Income-tax v. Radha Nagar Cold Storage (P) 
c 
D 
Ltd., 126 I. T .R. 66 and Addi. Commissioner of Income-tax, Kanpur v. 
Farrukhabad Cold Storage (P)Ltd., 107 I.T.R. 816, referred to. 
Kilmarnock Equitable Co-operative Society Ltd. v. /RC., 1.1966] 
42 TC 675 at Page 681, referred to. 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 3164 
(NT) or 1991. 
From the Judgment and Order dated 19.4.1984 of the Delhi High 
Court in I. Tax Ref. No. 250 of 1975, 
H.N. Salve and Pramod Dayal for the Appellant. 
J. Ramamurthy, Vijay K. Verma and Ms. A. Subhashini for the 
Respondent. 
E 
The Judgment of the Court was delivered by 
RANGANATH MISRA, CJ. Special leave granted. 
The judgment of the High Court of Delhi is challenged by the 
assessee in this appeal. Assessee is a private limited company running 
F 
a cold storage. The year of assessmentis 1973-74. An 'industrial com-
pany' as defined in section 2(7)(c) of Finance Act, 1973 for the 
purposes of the First Schedule of that Act was entitled to certain 
concessions in the matter of taxation. The appellant laid claim to such 
benefits by contending that it came within the meaning of 'industrial 
company'. The question that was referred by the Income-tax Appel-
.G 
late Tribunal to the High Court was: 
"Whether on the facts and in the circumstances of the case 
the assessee company running a cold storage could be held 
to be an industrial company for purposes of section 2(7)( c) 
of the Finance Act, 1973 and the First Schedule thereto?" 
,, 
-. 
.• 
COLD STORAGE v. C.I.T. (MISRA, J.] 
591 
The Income-tax Officer had not accepted the claim of the appel-
lant but the Appellate Assistant Commissioner conceded the claim and 
directed remission of the proceedings to the Income-tax Officer for 
re-computation of the tax by treating the appellant as an 'industrial 
company'. The Tribunal accepted the appeal of the Revenue and held 
that the appellant was not an 'industrial company'. The High Court has 
approved the conclusions reached by the Tribunal. 
'Industrial compnay' has been defined in section 2(7)(c) of the 
Finance Act, 1973 thus: 
"Industrial company means a company which is mainly 
engaged in the business of generation or distribution of 
electricity
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