9911796707
|
Home
Issues involved: Interpretation of whether the preparation of biris from tendu leaves and tobacco constitutes manufacturing or processing of goods u/s 5(1)(xxxii) of the Wealth Tax Act, 1957 and determination of whether the assessee-firm qualifies as an industrial undertaking.
Interpretation of Manufacturing or Processing of Goods: The dispute pertained to the assessment years 1973-74 and 1974-75, involving firms engaged in the manufacture of biris from tendu leaves and tobacco. The process involved cutting, rolling, filling, and packaging the biris, resulting in a new and distinct product. The Supreme Court's definition of "manufacture" was cited, emphasizing the emergence of a new article with a distinctive character or use. The court concluded that the firms' activities constituted manufacturing or processing of goods, making them industrial undertakings eligible for exemption u/s 5(1)(xxxii). Exemption Claim and Tribunal Decision: The assessee contended that their share in the firms should be exempt from tax due to their status as industrial undertakings. While the WTO initially disagreed, the AAC ruled in favor of the assessee. The revenue's appeal to the Tribunal was unsuccessful, with the Tribunal affirming the firms' classification as industrial undertakings and granting exemption u/s 5(1)(xxxii). The court upheld the Tribunal's decision, ruling in favor of the assessee and awarding costs. Significance of the Judgment: The judgment clarified the scope of manufacturing or processing of goods under the Wealth Tax Act, emphasizing the need for a transformation resulting in a new and distinct product. It underscored the importance of meeting the criteria of an industrial undertaking for claiming exemptions, providing a legal precedent for similar cases.
|
