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TMI Blog1993 (1) TMI 34X X X X Extracts X X X X X X X X Extracts X X X X ..... meaning of section 5(1)(xxxii) of the Wealth-tax Act, 1957 ?" The assessee is a partner in a firm, Messrs. Agiwal and Company. The said firm acts as a civil contractor engaged in construction of roads, buildings and drains. The assessee claimed exemption under section 5(1)(xxxii) of the Act of the value of interest in the assets of the firm on the ground that the entire assets of the firm formed part of an industrial undertaking belonging to the firm. The value of the assessee's interest in the assets of the firm was Rs. 1,40,000. The Wealth-tax Officer being not satisfied with the claim, refused to grant exemption. The assessee's appeal to the Appellate Assistant Commissioner failed. But on second appeal, the Tribunal accepted the claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his sub-section) forming part of an industrial undertaking belonging to a firm or an association of persons of which the assessee is a partner, or, as the case may be, a member ; " From clause (xxxii) quoted above, it is clear that an assessee being a partner in the firm can successfully claim exemption under the said clause only if the assets of the firm form part of an industrial undertaking belonging to the firm. "Industrial undertaking" as defined under the Explanation quoted above, means an undertaking engaged in the business of (i) generation or distribution of electricity or any other form of power, or (ii) in the construction of ships, or (iii) in the manufacture or processing of goods, or (iv) in mining. In the present case, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the face of it not embraced by the expression "manufacture or processing of goods". As such, the business activities of the firm cannot be said to be those of an industrial undertaking within the meaning of the statutory definition. The manufacturing of bricks for execution of the works contract is wholly inconsequential for determination of the issue involved because it is merely an ancillary or incidental activity. The same view has been taken by the Gujarat High Court in recent case reported in Smt. Shantaben Chinubhai v. CWT [1992] 196 ITR 44 by placing reliance on the decision of the Delhi High Court in the case of CIT v. Minocha Brothers P. Ltd. [1986] 160 ITR 134. The Delhi High Court itself has distinguished its earlier judgment i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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