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TMI Blog2009 (3) TMI 420X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 5(1)(xxxii) of the act and accordingly uphold the conclusion arrives at by the Ld. Commissioner (Appeals) though for different reason. The reference is disposed of. – Decision in favour of assessee – against the revenue. - 34 of 1986 - - - Dated:- 3-3-2009 - R. C. GAN DHI , ACTG. C. J. and M. N. BHANDARI J. Anuroop Singhi for the Commissioner. N. M. Ranka with N. K. Jain for the assessee. JUDGMENT The following questions have been referred by the Income-tax Appellate Tribunal for our answer in R. A. No. 1606/Delhi/84 for the assessment year1 976-77: "1. Whether on the facts and circumstances of the case, the Tribunal was justified in holding that the tax liability of Rs.10, 76, 380 resulting on acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an appeal was pre ferred by the assessee and the claim of the assessee was accepted and the amount of tax liability was ordered to be deducted from the net wealth. Further, appeal was preferred by the Revenue before the Appellate Tribunal which was decided in favour of the assessee. Hence, reference of question No.1. 4. The counsel for the Revenue submits that in view of the provisions of section 2(m)(iii) of the Wealth-tax Act, 1957, the amount was outstanding for a period of more than 12 months on the valuation date and thus was not deductible from the net wealth. It is urged that the question may be answered in favour of the Revenue. 5. Learned counsel appearing for the assessee, however, submits that the issue raised herein was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee rejecting the assessee's contention that the income-tax payable thereon had to be deducted according to section 2(m) of the Wealth-tax Act, 1957. The Appellate Assistant Commissioner, however, upheld the assessee's contention and held that the gross amount of Rs.76,000 minus tax liability thereon represented the net value of that asset for inclusion in the assessee's wealth. It was accordingly held that the Wealth-tax Officer was not just in refusing to deduct the amount of tax liability on this amount of Rs.76,000 from it for the purpose of computation of the net wealth of the assessee. The Tribunal has affirmed the view taken by the Appellate Assistant Commissioner. The Tribunal has also referred to Kesoram Industries and Cotto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same view. Following these decisions, the references have to be answered against the Revenue and in favour of the assessee." 6. Further reference is made of a judgment in the case of CWT v . J. K. Cotton Manufacturers Ltd. reported in [1984] 146 ITR 552 (SC). In the aforesaid judgment, the hon'ble apex court observed as under (page 561): "The alternative submission that the tax liabilities in the instant case must be taken to have become payable in 1952 under the Investigation Commission's order and must be regarded as having remained outstanding since 1952 is equally of no avail for the payability of the dues must depend upon the terms of the Commission's order and admittedly a scheme for payment of the dues by instalments wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t wealth and in view of the proposition laid down by the hon'ble apex court and the decision given by the Division Bench of this court, we are of the view that the question referred for our answer is to be decided in favour of the assessee and against the Revenue and accordingly we hold that the tax liability determined by the Commissioner on March 24, 1975, was deductible from the net wealth of the assessee. 8. So far as the second question is concerned, learned counsel appearing for the Revenue fairly conceded that the aforesaid issue has already been decided by this court against the Revenue and in that regard reference to the judgment of this court in case title CWT v. Shyarn Mohan [2007] 3 RLW 2101; [2009] 313 ITR 416, has be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... can be adopted. The provisions of the Wealth-tax Act also do not require the entire activity to be carried out by the assessee himself nor is there any requirement that the activity of processing should be dominant where the assessee carries a trading as well as processing of goods for becoming eligible for exemption. The only requirement is that the assessee's firms should be engaged in the business of manufacture or processing of goods. Keeping in view the nature of activity it even need not own any machinery himself In view of these findings and as the respondent assessee is engaged in the processing of goods within the meaning of the Explanation to clause (xxxi) of sub section (1) of section 5 of the Wealth-tax Act, we hold that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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