COMMISSIONER OF WEALTH TAX Vs. S VENKATACHALAM PILLAI

JUDGEMENT

(1.) AT the instance of the Department, the Tribunal referred the following question, under section 27 of the Wealth-tax Act, 1957, for our opinion "Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was correct in law in holding that the assessee's claim under section 5(1)(xxxii) representing the investment of Rs. 1, 30, 373 (computed in accordance with rule 2(1) of the Wealth-tax Rules, 1957) as a partner in the firm of Messrs. Venkatachalam Pillai and Son, which purchases standard gold and old gold and manufactures jewels through outside agency is allowable ?" The assessee is a partner in the firm of Venkatachalam Pillai and Son and he is assessed under the Wealth-tax Act, 1957. For the assessment year 1978-79, the assessee claimed exemption under section 5(1)(xxxii) on Rs. 1, 30, 373 being the investment made in the firm.

(2.) THE business activity of the firm consists of sale of gold ornaments to a limited extent. Gold is given to the workmen/acharis for converting into ornaments with specific directions given by the assessee. THE wages are paid to the goldsmiths.

(3.) THEREFORE, according to learned standing counsel, the assessee is not an industrial undertaking engaged in manufacturing and processing of goodsReliance was placed upon a decision in CWT v. V. O. Angadi Veeriah Chettiar. According to the facts which arose in the aforesaid decision, the assessee therein was a partner in two firms, O and A. The firm, O, purchased grey yarn and got it bleached for charges by the other firm, A.