TMI Blog1996 (7) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... ginned by outside agencies should be treated as an 'industrial undertaking' and accordingly the exemption contemplated under section 5(1)(xxxii) of the Wealth-tax Act should be allowed in respect of the assessee's share of interest therein?" The point for consideration is whether the partnership firm should be treated as industrial undertaking so as to claim exemption under section 5(1)(xxxii) of the Wealth-tax Act. The assessee claimed exemption under section 5(1)(xxxii) of the Wealth-tax Act out of the share income derived from a partnership firm, which is said to be engaged in manufacturing activities. The Wealth-tax Officer in the original assessment granted exemption in respect of the assessee's share in the partnership firm since th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nufacturing and hence the assessee was entitled to investment allowance. Now the point for consideration is whether ginning cotton by an outside agency would amount to the firm in which the assessee, is a partner, being directly involved in the manufacturing activity. According to the assessee the firm is having direct control over the outside agency in ginning the cotton. Therefore, the firm is directly involved in the manufacturing activity. When a similar question was raised before this court in CWT v. V. O. Ramalingam [1995] 216 ITR 566, this court held that a servant or an employee who acts under the direct control and supervision of his master and is bound to conform to all the reasonable orders given to him in the course of his work, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 169 Lord Wright said that a single test, such as the presence or absence of control, was often relied on to determine whether the case was one of master and servant, mostly in order to decide issues of tortious liability on the part of the master or superior and that in the more complex conditions of modern industry, more complicated tests have often to be applied. He said that it would be more appropriate to apply, a complex test involving : (i) control; (ii) ownership of the tools; (iii) chance of profit; (iv) risk of loss, and that control in itself is not always conclusive. He further said that in many cases the question can only be settled by examining the whole of the various elements which constitute the relationship between the par ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
