Law: Income Tax Act, 1961

Section: 256(2)

Law: Wealth Tax Act, 1957

Section: 5(1)(xxxii)

Wealth tax------ ----Exemption---Industrial undertaking---Undertaking engaged in distribution of power--- Meaning of "power"---Gas is not power---Partner of firm distributing gas is not entitled to exemption under S.5(l)(xxxii) --- Indian Wealth Tax Act, 1957, S.5(1)(xxxii). An industrial undertaking engaged in the business of generation or, distribution of electricity or any other form of power is entitled to exemption under section 5(1)(xxxii) of the Wealth Tax Act, 1957. According to the Oxford Dictionary, "power" means vigour of energy, mechanical energy as opposed to hand labour, the capacity for exerting mechanical force. It is no doubt true that power would include any form of energy as commonly understood. But, power would not include the source of power. Power can be generated through various sources. Coal, kerosene oil and gas constitute sources of power and they would not by themselves become power or energy. If it is power, it can be directly applied to get energy and if it is fuel, it should be oxidised for getting energy. Therefore, gas which is fuel cannot be considered as power. Held accordingly, that a firm which distributes gas is not an industrial undertaking and a partner of such a firm would not be entitled to exemption under section 5(1)(xxxii) of the Act. JUDGMENT K.A. THANIKKACHALAM, J.---At the instance of the Department, the Tribunal referred the following question of law for the opinion of this Court under section 256(2) of the Income Tax Act, 1961: "Whether, on the facts and in the circumstances of the case, the Tribunal is justified in holding that the business of the firm in which the assessee is a partner, would constitute an undertaking engaged in the distribution of power and accordingly the assessee is entitled to the relief under section 5(1)(xxxii) of the Wealth Tax Act, 1957?" The assessee, V. Saraswathi, was assessed to tax on the share income derived from Standard Appliances, Madurai, a firm carrying on the business of supply of gas cylinders processed by Indian Oil Company for domestic consumption. For the assessment year 1974-75, the assessee filed a wealth tax return claiming exemption under section 5(1)(xxxii) of the…

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