Law:

Section:

Section 5 of the Wealth-tax Act, 1957 - Exemption - Position prior to 1-4-1993 - Assessment years 1978-79 and 1979-80 - Whether where oil extracting machinery owned by assessee-HUF was leased out to another firm for use, it could be regarded as one belonging to assessee and assessee was entitled to exemption under section 5(1)(xxxi) - Held, yes - Whether section 5(1)(xxxi) does not require that owner himself should run undertaking or use machinery forming part of industrial undertaking - Held, yes - Whether expression 'belonging to' in section 5(1)(xxxi) should be understood in sense of assessee being owner of industrial undertaking - Held, yes Words and phrases - 'belonging to' as occurring in section 5(1)(xxxi) of the Wealth-tax Act, 1957 HELD The use of the expression 'belonging to' in section 5(1)(xxxi ) has to be understood in the sense of the assessee being the owner of the industrial undertaking. The fact that the machinery itself may have been leased out to another does not have the effect of depriving the assessee of his ownership of the undertaking. This clause does not require that the owner himself should run the undertaking or use the machinery forming part of the industrial undertaking himself. So long as it can be said that the assessee is the owner of the industrial undertaking, the industrial undertaking is to be regarded as one belonging to the assessee. [Para 5] In the instant case, there was no dispute that the assessee was the owner of the machinery used for extracting oil, that he had acquired the machinery for that purpose and that he had temporarily leased it out to another who was using the machinery for the same purpose. The machinery, therefore, belonged to the assessee, although the use thereof for the time being was by the lessee. Had it been the intention of the Legislature to extend the benefit of the exemption only to those actually running the industrial undertaking, the language employed in the provision would have been different. Instead of the term 'belonging to', the words 'being run by' would have been used. The words 'belonging to' imply the ultimate control which is an incidence of ownership. The emphasis is therefore, on…

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