Law: Wealth Tax Act, 1957

Section: 27(3),5(1)(xxxii),80J

Wealth tax--- ___Exemption-Industrial undertaking---Meaning of "industrial undertaking--Preparation of sweetmeats and biscuits does not constitute manufacture. Assessee not entitled to exemption---Indian Wealth Tax Act, 1957, S.5(i)(xxxi), Expln. (xxxii).---[CIT v. Sky Room (P.) Ltd (1992) 195 ITR 763 (Cal.) and S. P. Jaiswal Estates (Pvt.) Ltd v CIT (No.l) (1994) 298 ITR 208 (Cal.) dissented from] Under section 5(1)(xxxii) of the Wealth Tax Act, 1957, the value of the interest of the assessee in the assets, forming part of an "industrial undertaking belonging to a firm or an association of persons of which the assessee is a partner or, as the case may be, a member, shall not be included in the net wealth of the assessee. "Industrial undertaking" had been defined by way of a definition in the Explanation appended to section 5(1)(xxxi) thereof. The term "industrial undertaking", according to the said Explanation, means an undertaking engaged in the business of generation or distribution of electricity or any other form of power or in the construction of ships or in the manufacture or processing of goods or in mining. The first part of the said definition is relatable to generation or distribution of electricity or any other form of power or in the construction, of ships. The second part of the definition is relatable to the manufacture or processing of goods or in mining. The expression "manufacture or processing of goods", however, is not defined in the Wealth Tax Act. The term "manufacture" has to be considered with reference to the context of the enactment. Manufacture is a process which results in an alteration or change in the goods which are subjected to such manufacture. A commercially new different article is produced: Held, that the assessee's activity consisted of preparing sweetmeats and biscuits, out of raw materials, such as flour, sugar, etc. The various items of foodstuffs, as produced by the assessee, were mainly intended for trading and the conversion of raw materials into foodstuffs was only a "process in trading" and-`the production or preparation of the foodstuffs was incidental to trading. As such, the activity carried on by the assessee…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492