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TMI Blog1996 (3) TMI 182X X X X Extracts X X X X X X X X Extracts X X X X ..... lue of the silver sold in the market has been shown by the assessee as income from business in its income-tax assessments. While computing the wealth-tax assessments, the Assessing Officer included the value of the silver in the net wealth of the assessee for the two assessment years. The assessee appealed to the Commissioner (Appeals) against the said order passed by the Assessing Officer. According to the assessee, the silver collected from the dust and flakes is not asset within the meaning of section 40 of the Finance Act, 1983 so that it can be included in the net wealth of the assessee. The Commissioner (Appeals) by the impugned order held that the silver is a by-product in the process of development and printing of films. Therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 40 of the Finance Act, 1983 specifically excluded the stock-in-trade from the purview of the net wealth by inserting the proviso. It was further contended that silver being a production cannot be treated to be an asset within the meaning of section 40(3) of the Finance Act, 1983. On behalf of the assessee, reliance was placed on the decision of the Tribunal (Madras Bench 'D') in the case of Fagun Co. (P.) Ltd. v. Dy. CWT [1993] 45 ITD 117. 3. We have heard both the sides. The facts of the case are not in dispute. In the course of processing, developing and printing of films, chemicals are being used by the assessee-company. In the said process dust and flakes are accumulated, which contain some amount of silver. Thereafter by furt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing any such precious metal or alloy held for use as raw material in industrial production" has been included in the said section with effect from 1-4-1989. Further from 1-4-1989, a proviso was introduced to the said section, which reads as follows : " Provided that this section shall not apply to any asset referred to in clause (i), (ii), (iii), (iv), (v) or (vi), which is held by the assessee as stock-in-trade in a business carried on by it or, in the case of motor cars referred to in clause (vii), they are held as stock-in-trade in such business or registered as taxies and used as such in a business or of running motor-cars on hire carried on by the assessee. " According to the said proviso it is clear that the assets referred to in cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r as a stock-in-trade in its business, the same shall not be included in the net wealth of the assessee. Under the aforesaid situation so far as the assessment year 1989-90 is concerned that provision is clearly applicable in the case of the assessee. In relation to the assessment year 1988-89, following the decision of the Tribunal (Madras Bench 'C') in the case of Varadaraja Theatres (P.) Ltd. v. WTO [1989] 29 ITD 29, it can be held that the aforesaid provision is applicable for that year also. In the case of Varadaraja Theatres (P.) Ltd. the Tribunal held that although the cinema house was included within the exempted assets under section 40(3)(vi) of the Finance Act, 1983 with effect from 1-4-1989 by the Finance Act, 1988, for the earli ..... X X X X Extracts X X X X X X X X Extracts X X X X
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