Law:

Section:

Section 5(1)(xxxii) of the Wealth-tax Act, 1957 - Exemptions - In Case of Industrial Undertakings - Assessment years 1974-75, 1975-76, 1977-78 and 1978-79 - Whether exemption mentioned under section 5(1)(xxxii) would extend to that land and building which form part of an industrial undertaking - Held, yes FACTS The assessee was a partner in a firm, which owned an industrial undertaking. The assets of the undertaking comprised land and building as well. During the assessment proceedings the assessee claimed that he was entitled to exemption in respect of the value of his interest in the entire assets forming part of the industrial undertaking belonging to the aforesaid firm under clause (xxxii) of section 5(1). The WTO negatived the said claim to the extent of the value of the lands and buildings. On appeal, the AAC accepted assessee's case. On revenue's appeal, the Tribunal affirmed the order of AAC. On reference : HELD An exemption clause in a taxing statute, must be, as far as possible, liberally construed and in favour of the assessee, provided no violence is done to the language used. Apart from this, even if there are any repetitions or use of superfluous words in the clause under consideration, those can be justified as having been used by way of abundant caution. These cannot be used as a tool by the revenue to curtail the ambit of the exemption which is otherwise available to the assessee on a slightly liberal construction. Thus, it is impermissible to defeat an exemption in a taxing statute by employing intricate rules of interpretation and, if two views are possible then one which favours the assessee should be accepted. The phrase "referred to in any other clause of this section occurring in clause (xxxii ) of section 5(1) qualifies not only its proceeding words "any asset" but also qualifies the expression "any land or building, etc." Therefore, the value of the interest of the assessee in land and building of the undertaking can be excluded from exemption under this clause only if an exemption in respect thereof has been availed of in any other clause of section 5(1) which was not the case here. In the instant case, undisputedly, the assessee was…

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