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TMI Blog1983 (1) TMI 61X X X X Extracts X X X X X X X X Extracts X X X X ..... fore, the assessee, who is not actually carrying on the manufacture' of salt, cannot claim the benefit under the said provision. Thus a sum of Rs. 40,000, being the value of the salt pans, was included in his net wealth. The appeal therefrom to the AAC was also dismissed. Thereafter, the assessee filed an appeal before the Income-tax Appellate Tribunal. The Tribunal, after examining the scope of s. 5( 1)(xxxi) of the Act, felt that even though the assessee has leased out the salt pans it should be taken as an undertaking owned by the assessee, as contemplated under s. 5(1)(xxxi) of the Act. In that view the Tribunal held that the assessee in that case is entitled to the benefit of exemption under s. 5(1)(xxxi) of the Act. Aggrieved by the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovision in s. 5(1)(xxxi) of the Act. So far as this contention is concerned, it is seen that this contention was not at all urged before the Tribunal. Even otherwise, we do not see any substance in the said contention. The production of salt is clearly a manufacturing activity, and, therefore the Tribunal was right in proceeding on the basis that the production of salt is a manufacturing process. The next contention advanced by the learned counsel for the Revenue is that for the purpose of getting exemption under s. 5(1)(xxxi) of the Act, two conditions must be satisfied, namely, (i) it should be industrial undertaking, and (ii) the undertaking must belong to the assessee. It is not in dispute that the assessee in T.C. No. 428 of 1978 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in the prescribed manner, of assets (not being any land or building or any rights in any land or building or any asset referred to in any other clause of this subsection) forming part of an industrial undertaking belonging to the assessee." This provision uses the expression " industrial undertaking " and the "industrial undertaking" has been defined under the Explanation to s. 5(1)(xxxi) as follows: ".. ... . industrial undertaking' means an undertaking engaged in the business of generation or distribution, of electricity or any other form of power or in the construction of ships or in the manufacture or processing of goods or in mining." If the said Explanation is read distributively it means an undertaking engaged, (1) in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the actual activity of manufacture of salt is carried on by the lessee and not by the assessee, who is the lessor. Therefore, though the salt pan belongs to the assessee, the activity of manufacture of salt, which can alone be said to be an industrial undertaking, is actually being carried on by the lessee and not by the assessee. Therefore, the industrial undertaking cannot be said to belong to the assessee. The learned counsel for the assessee then contends that the expression " belonging to the assessee " in s. 5(1)(xxxi) qualifies the word "assets " occurring earlier and not the industrial undertaking as such. We are not inclined to accept the said construction placed by the learned counsel for the assessee on the said section. As ..... X X X X Extracts X X X X X X X X Extracts X X X X
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