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TMI Blog1993 (10) TMI 26X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal is justified in holding that the interest of the assessee in the assets of the firms qualified for exemption under section 5(1)(xxxii) ?" The brief facts of the case are that the assessee is a partner in the firms, M/s. Mittal and Co., Project Works, Dholpur, M/s. Mittal and Co., Dholpur and M/s. Mittal and Co., Bombay, and had credit balances. The firms were engaged in the construction of dams. It was claimed that the said three firms are industrial undertakings within the meaning of section 5(1)(xxxii) of the Wealth-tax Act, 1957, and the value of the assets forming part of such industrial undertakings belonging to the firms in which the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bombay High Court has held while interpreting the provisions of section 84(1) of the Income-tax Act that by subjecting the concrete mixture which consisted of several articles to certain processes along with iron bars, something new was brought into being. By the piling process something new which ultimately formed part of the construction came into being and since the end-product of the piling process was something which had an independent existence and an independent entity and was described as a pile, it was an article for the purpose of section 84(2)(iii) since it was brought into being by a special process of production and, therefore, the assessee was engaged in the "manufacture or production of articles" within the meaning of section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as to be seen as to whether the various conditions of the Explanation are fulfilled. There must be an industrial undertaking which must be engaged in the business of generation or distribution of electricity or any other form of power or in the construction of ships or in mining besides the "manufacturing or processing of goods". The manufacturing or processing of goods refers to movable property and there should be a manufacturing or processing of goods as end-products by the industrial undertaking. If an industrial undertaking is engaged in the manufacture or processing of any other item which does not fall in the category of "goods", then the exemption cannot be claimed. What constitutes "goods" has not been defined in the Wealth-tax Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved for determining whether manufacture can be said to have taken place is, whether the commodity which is subjected to the process of manufacture can no longer be regarded as the original commodity but is recognised in the trade as a new and distinct commodity.... The word 'production' or 'produce' when used in juxtaposition with the word 'manufacture' takes in bringing into existence new goods by a process which may or may not amount to manufacture. It also takes in all the by-products, intermediate products and residual products which emerge in the course of manufacture of goods." The word "article" was also interpreted as under: "The next word to be considered is 'articles' occurring in the said clause. What does it mean ? The word ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... observed: "The said principle, however, cannot be carried to the extent of doing violence to the plain and simple language used in the enactment. It would not be reasonable or permissible for the court to rewrite the section or substitute words of its own for the actual words employed by the Legislature in the name of giving effect to the supposed underlying object". The difference between the provisions of section 32A(2)(b)(iii) and section 80HH(2)(i) or, section 84(2)(iii) were also taken into consideration and it was observed that the word "manufacture or produce articles" in the last two sections are different from the provisions of section 32A, where the word "construction", manufacture or production of any article or thing has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , a building, a road, a canal and other similar constructions." In view of the above decision of the apex court the authorities relied on by learned counsel for the assessee cannot be considered now as good law. In the matter before the Delhi High Court in the case of National Projects Construction Corporation Ltd. v. CWT [1969] 74 ITR 465, the claim of the assessee was under the provisions of section 45(d) of the Wealth-tax Act, 1957, wherein the industrial undertaking was defined to mean an undertaking engaged in the manufacture, production, or processing of goods or articles or in mining or in the generation or distribution of electricity or any other form of power. Thus, section 5(1)(xxxii) refers to such industrial undertaking whic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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