1976 (12) TMI 98

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..... r concerns; M/s M.M. Nagalinga Nadar and M/s Nagalinga Vilas Ginning and Decorticating Works. The assessee was a partner having 106th share in the first concern. The assessee was not a partner in the second concern but it leased out the machinery to that firm. The assessee claimed exemption under s. 5(1)(xxxi) and (xxxii) respectively in respect of the industrial assets forming part of the sale bu .....

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..... t that the conclusions arrived at by the Commissioner were not correct in so far as all the conditions required under s. 5 (1)(xxxi) and (xxxii) are satisfied in the present case. The machinery was applied for industrial purposes in an industrial under-taking and processing of goods were carried on both in the individual business as well as in the partnership. Reference was made in this connection .....

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..... ssee. As regards the firm in which the assessee was a partner, it is pointed out that the machinery did not belong to the firm, even if the firm's activity be regarded as an industrial undertaking in so far as the firm did not own the machinery. Relief under s. 5(1) (xxxi) was not available. 4. We have considered the facts. The assessee has claimed exemption under s. 5(1)(xxxi) in respect of the .....

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..... e mere fact that after processing the raw materials, the finished products are handed over by the same constituents who gave the raw materials instead of selling them to outsiders, does not make the business of the assessee any the less an industrial undertaking. The learned Dept. counsel brought to out notice the decision in ITA No 577 & 578 (MDS) 74-75 order dt. 27th March, 1976. The facts of th .....

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..... assessee. The conditions necessary for the application of s. 5(1) (xxxii) are not satisfied in the present case. The Commissioner's order, therefore, in so far as enhancing the net wealth by Rs. 37,266 is concerned, should be upheld. We, therefore, allow the assessee's appeal in part and direct that the taxability of the assessee be determined on the above basis. The appeal is partly allowed.
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