9911796707
TMI Blog1994 (11) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... tner in the firm of Messrs. Venkatachalam Pillai and Son, which purchases standard gold and old gold and manufactures jewels through outside agency is allowable ? " The assessee is a partner in the firm of Venkatachalam Pillai and Son and he is assessed under the Wealth-tax Act, 1957. For the assessment year 1978-79, the assessee claimed exemption under section 5(1)(xxxii) on Rs. 1,30,373 being the investment made in the firm. The business activity of the firm consists of sale of gold ornaments to a limited extent. Gold is given to the workmen/acharis for converting into ornaments with specific directions given by the assessee. The wages are paid to the goldsmiths. The Wealth-tax Officer denied exemption claimed under section 5(1)(xxxii) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ufacturing the ornaments, and for making the ornaments, wages were paid by the assessee. Therefore, according to learned standing counsel, the assessee has no control over the goldsmiths, who are making the ornaments. In support of his contention, learned standing counsel relied upon the decisions in CWT v. K. Lakshmi [1983] 142 ITR 656 (Mad), in CWT v. V. O. Angadi Veeriah Chettiar [1987] 167 ITR 341 (Mad) and in C. Kadarkarai v. CWT [1989] 176 ITR 121 (Mad). On the other hand, none was present on behalf of the assessee. We have heard learned standing counsel for the Department and perused the records carefully. The fact remains that the assessee is a partner in a partnership firm and the partnership firm was doing business in selling go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exemption in respect of his interest in the assets of the other firm, A. In C. Kadarkarai v. CWT [1989] 176 ITR 121 (Mad), this court, while considering the provision of section 5(1)(xxxii) of the Wealth-tax Act, held that inasmuch as the assessee was engaged in processing the grey cloth by dyeing and printing, it manufactures and produces an article which is distinct from the grey cloth which is used as a raw material. Therefore, the activity which the assessee carried on is a manufacturing activity, in spite of the fact whether the grey cloth belongs to it or to its customers. Therefore, this court has held that the assessee therein is entitled to the benefit under section 5(1)(xxxii) of the Wealth-tax Act, 1957. According to the facts ..... X X X X Extracts X X X X X X X X Extracts X X X X
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