Dr. B.P. Saraf, J.
1. By this reference under section 256(1) of the Income-tax Act, 1961, made at the instance of the Revenue, the following question has been referred by the Income-tax Appellate Tribunal to this court for opinion :
'Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the business of fishing with the trawler was an industrial undertaking, eligible for deduction under section 80J of the Income-tax Act, 1961
2. The assessee-company carries on the business of catching, buying and selling fish. For the purpose of fishing, it used a trawler. In respect of this trawler, the assessee claimed relief under section V of the Income-tax Act, 1961 ('the Act'), on the ground, inter alia, that the trawler used by it for the purpose of fishing was a 'ship'. The alternate ground was that the business of catching fish and selling them after processing amounts to manufacture or production of articles by an industrial undertaking. The Income-tax Officer rejected the claim of the assessee for relief under section 80J in respect of the trawler by following the decision of this court in New lndia Fisheries Ltd. v. P. M. Mehra, ITO : [1971]82ITR765(Bom) . The order of the Income-tax Officer was confirmed by the Commissioner of Income-tax (Appeals). However, on further appeal by the assessee, the Income-tax Appellate Tribunal ('the Tribunal') accepted the contention of the assessee that the business of the assessee of catching fish and selling the same after processing amounted to an industrial undertaking and, therefore, the assessee would be entitled to relief under section 80J of the Act in respect of the trawler in question. While arriving at this conclusion, the Tribunal relied upon the decision of the Kerala High Court in Cochin Co. v. CIT : [1978]114ITR822(Ker) . Hence, this reference under section 256(1) of the Act at the instance of the Commissioner.
3. In the course of hearing of this reference, learned counsel for the Revenue, Mr. G. S. Jetley, submitted before us that the controversy in this case stands concluded in favour of the Revenue by the decision of this court in New India Fisheries Ltd. v. P. M. Mehra, ITO : [1971]82ITR765(Bom) . Mr. S. J. Mehta, counsel appearing for the assessee, does not dispute the above submission. He, however, submits that the real controversy in that case pertained to the interpretation of the expression 'ship' and the question for consideration of the court was whether the trawler used by the assessee for fishing in the deep seas could be held to be a 'ship'. It is this question which was decided in favour of the Revenue. According to him, the question whether the activity of catching fish and selling the same amounts to manufacture or production of articles by an industrial undertaking within the meaning of section 80J of the Act was not a point at issue before this court in the above case. He, therefore, contended that this aspect of the controversy deserves careful consideration and requires determination. Reliance was placed in support of this contention on the decision of the Kerala High Court in Cochin Co. v. CIT : [1978]114ITR822(Ker) .
4. We have carefully considered the rival submissions and perused the decision of this court in New India Fisheries Ltd. v. P. M. Mehra, ITO : [1971]82ITR765(Bom) in the light thereof. It appears from the above decision that the only question raised in that case related to the construction of the expression 'any profits and gains derived from a ship' occurring in section 80J of the Act. The case of the assessee was that the trawlers used by it were ships, and since the substantial profits of its business had been derived from such trawlers used by it in the business of deep sea fishing, it was entitled to get the benefit of section 80J in respect thereof. This contention of the assessee was negatived by this court and it was observed that the expression 'derived from a ship' occurring in section 80J must mean originating from that ship as a source of direct income. In that view of the matter, it was held in that case that profits and gains from the business activity like catching fish in the deep seas with the aid of ships (trawlers) and selling the same cannot be regarded as profits and gains derived from ships to which the deduction allowed in sub-section (1) of section 80J will be applicable. It is thus obvious that in the above case, this court was not called upon to decide whether catching fish in the deep seas amounts to 'manufacture' or 'production of articles' within the meaning of section 80J of the Act. It is, therefore, necessary for determination of controversy in regard to the eligibility or entitlement of the assessee to get its relief under section 80J of the Act in respect of profits derived by it from deep sea fishing.
5. Section 80J of the Act grants certain reliefs to industrial undertakings, ships and hotels falling thereunder in respect of the profits and gains derived by them on fulfilment of the conditions set out therein. One of the conditions applicable in the case of an industrial undertaking is that it manufactures or produces articles. The question that fell for determination in all such cases where relief is claimed by an industrial undertaking under this Act is : Whether it manufactures or produces articles. The admitted position in this case is that the assessee carries on the business of catching fish in the deep seas with the aid of a trawler and sells the same. The question that arises is : whether 'catching fish' amounts to 'manufacture or production of fish'. The answer obviously has to be in the negative. Because the assessee catches fish, he does not manufacture or produce fish. He cannot claim to be a manufacturer or producer of fish. The activity of catching fish in the deep seas can more appropriately be compared to collection of sand or stones from the river bed or birds and animals from the forests. Just as catching elephants in deep forests by trapping them with the aid of devices-conventional or sophisticated-cannot be termed as manufacture or production of elephants, catching of fish also cannot be held to be manufacture or production of fish. In that view of the matter, the benefit of section 80J will not be available in respect of profits from the business of catching fish in the deep seas.
6. We have also perused the decision of the Kerala High Court in Cochin Co. v. CIT : [1978]114ITR822(Ker) . We fail to understand how that decision is relevant for determination of the controversy before us in the present case. In that case, the Kerala High Court was called upon to decide whether the assessee who was engaged in the business of processing and export of fish was an industrial company within the meaning of section 2(7)(a) of the Finance Act, 1976, and, therefore, liable to be taxed at the concessional rate of tax applicable to industrial companies.'Industrial company' was defined in that case to mean a company which is mainly engaged, inter alia, in the manufacture or processing of goods or mining. The question was whether the assessee who was engaged in the processing of fish for export could be held to be an 'industrial company' within the meaning of section 2(7)(a) of the Finance Act. The High Court held that the assessee being engaged in the 'processing of fish' satisfied the requirement and, hence, it was an industrial company. That is not the position in the present case. Here, for getting relief under section 80J, the assessee should 'manufacture or produce articles'. The benefit of this section is not available to those undertakings which are engaged in 'processing of goods or articles' not amounting to manufacture or production.
7. Obviously, in the instant case, the assessee does not manufacture or produce articles. He is, therefore, not entitled to any relief under section 80J of the Act. This position will not be affected even if the fish caught by him in the deep seas are subjected to some process because the benefit of section 80J is restricted only to undertakings which 'manufacture or produce' articles.
8. Having regard to the above discussion, we are of the clear opinion that the assessee who is engaged in the business of fishing with a trawler is not eligible for relief under section 80J of the Act in respect of the profits of such business. Hence, the question referred to us is answered in the negative and in favour of the Revenue.
9. In the facts and circumstances of the case, there shall be no order as to costs.