TMI Blog1967 (3) TMI 25X X X X Extracts X X X X X X X X Extracts X X X X ..... the case, the assessee-company, which was established in 1924, was entitled to the five years' tax holiday provided in section 45(d) of the Wealth-tax Act, 1957, in respect of the new section started by it in August, 1955, for the manufacture of worsted wool yarn ? " It has arisen in these circumstances. M/s. Oriental Carpet Manufacturers (India) Private Limited (hereinafter referred to as the company) is a private limited company which was established in 1924 for the manufacture of carpets. In August, 1955, this company expanded its business and put up a new unit for the manufacture of worsted wool yarn and invested a capital of Rs. 8,55,725 therein. With regard to the assessment years 1957-58 and 1958-59, the assessee-company claimed be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... companies which had set up the new units after the commencement of the Act in 1957. The exemption claimed, therefore, according to the Appellate Assistant Commissioner, was rightly refused by the Wealth-tax Officer. On appeal to the Appellate Tribunal, vide its order dated 16th October, 1961, it came to the conclusion that section 45 was intended to exclude the new companies from the class of taxable persons and, as the assessee-company was an old company, this section did not apply. The proper section to be applied in this case, according to the Tribunal, was section 5(1)(xxi) which envisaged the expansion of industries by the old companies. But even the benefit of this section was not available to the assessee-company, because the expansi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion was that similar exemption should be given to the new concerns as well as the old companies who expanded their business by setting up new units with the object of carrying on an industrial undertaking. He, however, conceded that the assessee-company could not derive any benefit from the provisions of section 5(1)(xxi), because the unit had been established prior to the commencement of the Act. Sections 5(1)(xxi) and 45(d) read as under: " 5. (1) Wealth-tax shall not be payable by an assessee in respect of the following assets, and such assets shall not be included in the net wealth of the assessee:--- (xxi) that portion of the net wealth of a company established with the object of carrying on an industrial undertaking in India wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... establishment as if this Act had been in force on and from the date of its establishment ; Explanation.- For the purposes of clause (d), 'industrial undertaking' means an undertaking engaged in the manufacture, production or processing of goods or articles or in mining or in the generation or distribution of electricity or any other form of power." A plain reading of these sections would show that the expansion of business by an existing company is specifically dealt with in section 5(1)(xxi) and not in section 45(d). Undoubtedly, the industrial undertaking in the instant case comes within the meaning of the Explanation to clause (d) of section 45. The company had set up a new and separate unit by way of substantial expansion of its un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of the Act. Be that as it may, if the words of the statute are quite clear and are not capable of any other interpretation, the courts are bound to give effect to them. We cannot refer to the Select Committee Report or to the debates in Parliament in order to find out the intention of the legislature, as was suggested by the counsel for the assessee-company, when it is quite clear from the statute itself. It was held by the Supreme Court in Thakur Amar Singhji v. State of Rajasthan that recourse to rules of construction would be necessary only when a statute is capable of two interpretations, but where the language was clear and the meaning plain, effect must be given to it. In view of what I have said above, the answer to the questio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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