COMMISSIONER OF WEALTH-TAX Vs. DINESH PRAKASH

JUDGEMENT

(1.) At the instance of the Revenue, the Income-tax Appellate Tribunal, Allahabad Bench, Allahabad, has referred the following two questions relating to the assessment years 1973-74 and 1974-75 for our opinion:

(2.) The assessee, an individual, is a partner in two firms, Prakash Enterprise and Jagat Narain Chand Prakash. Both the firms were engaged in the business of dyeing and printing of cotton cloth and making sarees therefrom. For both the assessment years, the assessee claimed exemption under Section 5(1)(xxxii) of the Wealth-tax Act, 1957 ("the Act, 1957", for short). The Wealth-tax Officer, however, refused the exemption and included the value of the assessee's interest in the assets forming part of both the firms on the ground that the firm, Prakash Enterprise, got the printing done on job basis. On appeal, the Appellate Assistant Commissioner found that Prakash Enterprise was an industrial undertaking within the meaning of the Explanation to Clause (xxxi) of Section 5(1) of the Act, 1957, and he, thus, allowed the exemption claimed by the assessee. He, however, did not discuss the assessee's case for exemption in regard to the other firm, Jagat Narain Chand Prakash.

(3.) The dispute was further carried in appeal by the Revenue before the Appellate Tribunal. Before the Appellate Tribunal, it was contended by the assessee that the business of both the aforesaid firms was almost the same and that in the case of Chand Prakash, another partner of Jagat Narain Chand Prakash, the Allahabad Bench-B of the Appellate Tribunal, held in W.T.A. No. 385(A) of 1975-76 that that firm was an industrial undertaking within the meaning of the Explanation to Clause (xxxi) of Section 5(1) of the Act, 1957, and, therefore, he was entitled to exemption with regard to the value of his interest in the assets forming part of that industrial undertaking. The contention was that when the activities of both the firms are the same, the same view which had been taken in the case of Chand Prakash, another partner of Jagat Narain Chand Prakash, should have been taken by the Wealth-tax Officer in the case of the assessee also for both the firms. The Appellate Tribunal on the analogy of its decision being given in the case of Chand Prakash, accepted the assessee's claim for exemption. Also, the Appellate Tribunal recorded a finding of fact in regard to Prakash Enterprise as follows :