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TMI Blog1993 (10) TMI 57X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner of Income-tax (Appeals) that the firm is an industrial undertaking and as such weighted deduction under section 35B(1A) of the Income-tax Act, 1961, was to be allowed?" The brief facts of the case are that the assessee is carrying on business in rough emeralds by purchasing the same from the local market and converting the same to Tawadda, Potta and cut emeralds by processing. The contention of the assessee was that the firm was engaged in manufacturing and, therefore, it constituted an industrial undertaking and it being a small scale exporter was entitled to weighted deduction. The Inspecting Assistant Commissioner came to the conclusion that the assessee is not an industry at all and, therefore, the deductions have wrongly been c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not a holder of an export house certificate and it has to be seen as to whether it is a small scale exporter. Explanation (a) to section 35B(1A) has defined "small scale exporter" according to which he is a person who exports goods manufactured or produced in any small scale industrial undertaking owned by him. The Tribunal has taken into consideration the fact that, in the process rough emeralds are sorted, converted into ghats and finally shaped, polished and colouring was done through skilled labourers who are paid on the basis of work done. The provisions of section 5(l)(xxxii) of the Wealth-tax Act are as under : "The value, as determined in the prescribed manner of the interest of the assessee in the assets (not being any land or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly and Sewerage Board v. A. Rajappa, AIR 1978 SC 548, was also taken into consideration and it was found that the entire activity or various steps or stages in the manufacture or process of gems beginning with the point where the same was purchased from the local market and ending with the point where it was made marketable and sold by the assessee-firm has to be seen. The definition of industry as given under section 2(j) of the Industrial Disputes Act is as under : Industry. -The definition of 'industry' in this clause is both exhaustive and inclusive and is ambivalently comprehensive in scope. It is in two parts. The first part says that it "means any business, trade, undertaking, manufacture or calling of employers" and then goes on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rter. The decision in the case of Vimal Chand Daga (HUF) [1988] 172 ITR 264 (Raj) relied on by the Commissioner of Income-tax (Appeals) has already been the subject-matter of reference to this court and it was found that the triple test mentioned therein have to be established even under the language of section 5(1)(xxxii) of the Wealth-tax Act. Under section 5(1)(xxxii), the value of the assets forming part of an industrial undertaking belonging to a firm has to be determined. Even if the words "belonging to a firm" is interpreted equivalent to owned by the firm still the assessee has to establish that the triple test which was laid down in the case of CWT v. Vimal Chand Daga (HUF) [1988] 172 ITR 264 (Raj) referred to above is satisfied. L ..... X X X X Extracts X X X X X X X X Extracts X X X X
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