1977 (5) TMI 42

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..... s, lace etc. giving them to the handloom weavers, who make clothes for wages and selling such clothes. 3. For the asst. yr. 1974-75 assessee filed a return on 21st Sept., 1974 admitting total wealth of Rs. 2,21,530. Subsequently he filed a revised return on 12th Jan., 1976 admitting total wealth of Rs. 99,835. For the asst. yr. 1975-76 assessee filed a return disclosing wealth of Rs. 1,15,346. The assessee claimed before the WTO that in evaluation his share in the said firm, exemption under s. 5(1)(xxxii) of the WT Act should be granted. The WTO rejected the above contention, on the ground that the aforesaid firm could not be considered as one engaged "in the business of manufacturing of processing of goods". By his orders dt. 19th Jan., .....

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..... assets referred to in any other clause of this sub-section) forming part of an industrial undertaking belonging to a firm or an AOP of which the assessee is a partner, or as the case may be, a member. Explanation: For the purpose of cl. (xxxii), the term industrial undertaking means an undertaking engaged in the business of generation of or distribution of electricity or any other form of power in the construction of ships or in the manufacture or processing of goods or in mining. 7. As already stated, the partnership firm in which the appellant is a partner, purchases art silk yarn, dyes, lace etc. and gives them to the handloom weavers, who convert them into cloth and receive wages from the partnership firm and the cloth so manufact .....

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..... etc. and employers weavers to convert them into cloth and sell cloth on its own account. These are clearly trading activities organised and continuous in their character and it will be difficult to escape the conclusion that they constitute business of manufacturing. We, therefore, held that the partnership firm, in which the appellant is a partner, is a industrial undertaking and the appellant s interest in the assets forming part of the industrial undertaking and belonging to the partnership is exempt under s. 5(1)(xxxii) of the WT Act. 8. Similar view has been taken by the Tribunal by its order in Smt. K. Thangammal vs. Third WTO, Salem (WTA No. 533/75-76), Sri P. Shanmuga Mudaliar vs. WTO, Salem (WTA No. 47/76-77) and Smt. K. Thangam .....

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