COMMISSIONER OF WEALTH TAX Vs. CHANDRA PRAKASH AGARWAL

JUDGEMENT

(1.) At the instance of the Revenue, the following question has been referred under Section 27(1) of the Wealth-tax Act, 1957 : " Whether, on the facts and in the circumstances of the case, the Tribunal was correct in holding that the firm in which the assessee was a partner was an industrial undertaking within the meaning of the Explanation to Section 5(1)(xxxi) of the Wealth-tax Act, 1957, and was entitled to exemption under Section 5(1)(xxxii) of the Wealth-tax Act, 1957 ?"

(2.) The respondent assessee is an individual and the valuation date for each assessment was the last date of the relevant calendar year. The assessee is a partner in a registered firm, M/s. Indian Cold Storage and Industries Co., Meerut, which carries on the business of running cold storage and also manufactured ice. In respect of his interest in the aforesaid firm amounting to Rs. 87,686 for the assessment year 1973-74 and the valuation of his interest in the said firm for the subsequent year 1974-75 being Rs. 96,006, the assessee claimed exemption under Section 5(1)(xxxii) of the Wealth-tax Act on the ground that the firm, M/s. Indian Cold Storage and Industries Co., Meerut, was an industrial undertaking within the meaning of the Explanation to Section 5(1)(xxxi) and, consequently, he was entitled to the exemption claimed.

(3.) The Wealth-tax Officer did not accept the claim for exemption made by the assessee. Aggrieved, the assessee filed two appeals before the Appellate Assistant Commissioner for both the years. The appeals were dismissed by the Appellate Assistant Commissioner. The assessee, thereafter, went up in second appeal to the Income-tax Appellate Tribunal. The Income-tax Appellate Tribunal upheld the contention of the assessee and, by finding that the appellant is a partner of the firm which was engaged in manufacturing and processing, held that the assessee was entitled to exemption under Section 5(1)(xxxii) of the Wealth-tax Act. As a result, the two appeals of the assessee were accepted. The Department thereafter moved an application for making a reference to this court.