COMMISSIONER OF WEALTH TAX Vs. SHANTI DEVI

JUDGEMENT

(1.) THESE are two references made by the Income-tax Appellate Tribunal (for short, "the Tribunal"), at the instance of the Department in the cases of two assessees, relating to the assessment year 1976-77. The following question of law has been referred in each of the two references under Section 27(1) of the Wealth-tax Act, 1957 (for short, "the Act") :

(2.) THE assessees, Smt. Shanti Devi and Shri Sat Dev, were partners in the firm, Ram Nath Anil Kumar, Jagraon. THE firm purchased groundnuts and got them crushed by an outside party. THE two partners, above-named, claimed the benefit of Clause (xxxii) of Sub-section (1) of Section 5 of the Act on the ground, that the firm, in which they were partners, was engaged in the business of manufacturing groundnut oil and was, therefore, an industrial undertaking. Since the assessees were its partners, they were entitled not to include the value of their respective interests in the assets of the firm. THE plea of the assessees was that under Sub-section (1) of Section 5 of the Act, wealth-tax was not payable by an assessee in respect of the assets specified in the clauses of Sub-section (1). Clause (xxxii) was inserted in Section 5(1) of the Act by the Finance Act, 1972, with effect from April 1, 1973, and it laid down as under :

(3.) THE two assessees went in appeal before the Appellate Assistant Commissioner but did not succeed. In second appeal before the Tribunal, their plea was accepted.