Sabyasachi Mukharji, J.
1. In this case 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 has misdirected itself in law in holding that the business carriedon by the assessee in galvanizing metal on behalf of the customers was an industrial undertaking engaged in manufacture and production of articles within the meaning of Section 84 of the Income-tax Act, 1961, and as such the assessee was entitled to relief under Section 84 of the said Act for the assessment year 1965-66 in respect of profits derived from such business ?'
2. The assessment year involved is 1965-66 and the previous year ended on March 31, 1965. The assessee is a private limited company. During the year the assessee-company carried on the business of manufacturing and sale of metals and also in galvanizing work for outsiders. The assessee claimed exemption of tax under Section 84 in respect of business of manufacturing and sale of metals and its galvanizing work. The ITO held that the assessee was not entitled to relief under Section 84 in respect of trading in raw materials from which a gross profit of Rs. 2,926 was earned. The galvanizing work from outsiders was started in the previous year and the assessee received a sum of Rs. 44,673 as galvanizing charges. The ITO was of the view that the business of galvanizing for outsiders did not involve manufacture or production of any articles as contemplated under Section 84(2)(iii) of the I.T. Act, 1961. He, therefore, refused the benefit of relief under Section 84 to the assessee with respect to galvanizing work.
3. The assessee went up in appeal before the AAC. The AAC held that the work of converting ordinary metal into galvanizing metal did not amount to manufacture of goods as the raw material which was converted into finished products did not belong to the assessee. He, therefore, affirmed the action of the ITO on this aspect. There was an appeal before the Income-tax Tribunal and after discussing several authorities the Tribunal was of the view that the work of galvanizing in this case came within the purview of Section 84(2)(iii) and, therefore, the assessee was entitled to the benefit. In the premises, the question mentioned hereinbefore has been referred to this court. We are, therefore, concerned with the question whether the business carried on by the assessee in galvanizing metal on behalf of the customers was an industrial undertaking engaged in manufacture and production of articles within the meaning of Section 84 of the I.T. Act, 1961. Section 84 of the I.T. Act, 1961, as it stood at the relevant time, provides as follows ;
'84. (1) Save as otherwise hereinafter provided, income-tax shallnot be payable by an assessee on so much of the profits or gains derivedfrom any industrial undertaking or business of a hotel or from any ship,to which this section applies, as does not exceed six per cent. per annumon the capital employed in such undertaking or business or ship, computedin the prescribed manner.'
4. Sub-section (2) of the said section applies to any industrial undertaking which fulfils all the following conditions, namely :
'(i) It is not formed by the splitting up, or the reconstruction, of a business already in existence ;
(ii) it is not formed by the transfer to a new business of a building, machinery or plant previously used for any purpose;
(iii) it manufactures or produces articles or operates one or more cold storage plants, in any part of India, and has begun or begins to manufacture or produce articles or to operate such plant or plants, at any time within the period of twenty-three years next following the 1st day of April, 1948, or such further period as the Central Government may, by notification in the Official Gazette, specify with reference to any particular industrial undertaking;
(iv) in a case where the industrial undertaking manufactures or produces articles, it employs ten or more workers in a manufacturing process carried on with the aid of power, or employs twenty or more workers in a manufacturing process carried on without the aid of power:
Provided that the condition in Clause (i) shall not apply in respect of any industrial undertaking which is formed as a result of the re-establishment, reconstruction or revival by the assessee of the business of any such industrial undertaking as is referred to in Section 33B, in the circumstances and within the period specified in that section:
Provided further that the condition in Clause (ii) shall be deemed not to have been contravened if the industrial undertaking is set up in rented premises.'
5. We are only concerned with the question whether the assessee fulfilled Clause (iii) of Sub-section (2), that is to say, whether it can be said that it manufactures or produces articles as contemplated in Clause (iii). The work done by the assessee is the work of galvanizing. The dictionary meanings of galvanization as it appears from Webster's Third New International Dictionary, Vol. 1, page 932, are as follows:
'Galvanization--the act or process of galvanising: specify: the application of an electric current to the human body for medical purposes ;
Galvanize--1 a: to subject to the action of an electric current;
b : to arouse, stimulate, or excite as if by the application of an electric current;
2 : to coat (iron or steel) with zinc--compare ELECTRO GALVANIZE
Galvanised iron--iron or steel coated with zinc to protect it from rust,'
6. The expressions 'manufacture' or 'produce' are well-known expressions in fiscal legislation. The expression 'manufacture' is anexpression very often considered in the cases dealing with Central excise and sales tax matters. It has been held that the production or manufacture of goods involve bringing into existence new goods or articles known as such goods and articles in the market.
7. In the case of CIT v. Ajay Printery P. Ltd. : 58ITR811(Guj) , the Division Bench of the Gujarat High Court was concerned with the business of printing balance-sheets, profit and loss accounts, dividend warrants, pamphlets, share certificates, etc. It was held by the Division Bench of the Gujarat High Court that the business of printing balance-sheets, profit and loss accounts, dividend warrants, pamphlets, share certificates, etc., required by companies was a business which consisted wholly of 'manufacture of goods' within the meaning of Clause (ii) of Expln. 2 to Section 23A of the Indian I.T. Act of 1922. The pamphlet or the balance-sheet or the share certificate, according to the Division Bench of the Gujarat High Court, if we may say so with respect rightly, is an -article quite different from the raw materials, paper and ink from which it is made, the user of which would be different from the user of the raw materials used in producing it. In those circumstances, the Gujarat High Court came to the conclusion that production or bringing those articles into existence is manufacture or production of that article.
8. In the case of CIT v. Tata Locomotive and Engineering Co. Ltd. : 68ITR325(Bom) , the Division Bench of the Bombay High Court had to consider this question and observed that the word 'manufacture' had a wider and also a narrower connotation. In the wider sense, it simply meant making or fabricating or bringing into existence an article or product either by physical labour or by power and the word 'manufacture' in the ordinary parlance would mean a person who made, fabricated or brought into existence a product or an article by physical labour or power. The other shade of meaning which, according to the Division Bench of the Bombay High Court, was the narrower meaning, implied transforming raw materials into a commercial commodity or a finished product which had an entity by itself but it did not necessarily mean that the materials with which the commodity was so manufactured must lose their identity. But both the words 'manufacture' and 'produce' applied to bringing into existence something which was different from its components. Whether one took into account the wider or narrower meaning of the word manufacture, according to the Division Bench of the Bombay High Court, was assembling of automative bus or truck chassis from imported parts in a knocked down condition would give rise to an article which was totally different from the parts and would amount to manufacture. Applying that test the question before us would be whether the process of galvanizing brought into existence an article known commonly as different before galvanisation. We have noted the dictionary meaning of the word 'galvanizing'. Galvanisation is an act or process of galvanising or coating to protect it from rust. This does not bring into existence a different article or an article commonly known to the people differently who deal with it before it was galvanised. This work of galvanisation may or may not be processing, We had noted in the case of CIT v. Radha Nagar Cold Storage (P.) Ltd. : 126ITR66(Cal) that the expression 'process' was different from the expression 'manufacturing'. In this section, what is required is that the articles should be manufactured or produced. The process of galvanising does not result in the manufacture or production of new goods as such. In that view of the matter, we are of the opinion that the assessee-company does not fulfil Clause (iii) of Sub-section (2) of Section 84 of the I.T, Act, 1961, as it stood at the relevant time. In the aforesaid view of the matter, the question is answered in the affirmative and in favour of the revenue.
9. There will be no order as to costs.
Sudhindra Mohan Guha, J.
10. I agree.