TMI Blog1990 (1) TMI 37X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 5(1)(xxxii) of her interest in Messrs. Popular Garage ?" The matter arises under the Wealth-tax Act. The respondent is an assessee to wealth-tax. In the return of net wealth for the assessment year 1976-77, the assessee claimed deduction under section 5(1)(xxxii) of the Wealth-tax Act of her interest in the firm, Messrs. Popular Garage. The value of the interest was calculated by the assessee at Rs. 1,00,566. The entire amount was claimed as exempt under section 5(1)(xxxii) of the Act. Originally, the said amount was not included as assets in the wealth tax assessment. However, the Commissioner of Wealth-tax, by order dated March 18, 1983, directed revision of the assessment by withdrawing the exemption granted by the Wealth-tax Offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he prescribed manner of the interest of the assessee in the 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 sub-section) forming part of an industrial undertaking belonging to a firm or an association of persons of which the assessee is a partner, or, as the case may be, a member;" "(xxxi) Explanation.-For the purposes of clause (xxxa), this clause, clause (xxxii) and clause (xxxiv), the term '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;" The short question that arises for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame. It was concluded that when an old engine, which had become unusable is restored to its original condition, it will get a new lease of life. It clearly amounts to processing of goods and the claim of exemption by the assessee under section 5(1)(xxxii) is sustainable. In coming to the above conclusion, the Appellate Tribunal was largely influenced by the decision of the Delhi High Court in Kalsi Tyre (P.) Ltd.'s case [1981] 131 ITR 636. The Appellate Tribunal held that the activity carried on by Messrs. Popular Garage is identical with that of retreading of tyres in the sense that an article which had worn out and had become useless is restored to a useful article but without bringing into existence a new article. We are of the view th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing of the original commodity should bring into existence commercially different or distinct commodity. The commodity should undergo a change as a result of some operation performed on it or in regard to it. Reliance was placed on the decisions in Chowgule and Co. P. Ltd. v. Union of India [1981] 47 STC 124; AIR 1981 SC 1014; CIT v. Casino (Pvt.) Ltd. [1973] 91 ITR 289 (Ker) ; CIT v. Commercial Laws of India Pvt. Ltd. [1977] 107 ITR 822 (Mad). Counsel for the Revenue also stressed the fact that we are concerned with an exemption in a taxing statute, unlike the question involved in 131 ITR 636, 91 ITR 289, 107 ITR 822, etc. It was submitted that in view of the decision of this court in Deputy Commissioner v. Carmel Book Stall [1989] 1 KLT 70 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SC 86, 89 and Federal Commissioner of Taxation v. Jack Zinader Proprietary Ltd. [1948-49] 78 CLR 336, 343 and 350-Per Dixon J. and Williams J.). As a final fact-finding authority, it is for the Income-tax Appellate Tribunal to find whether, by doing the work of reboring of automobile and marine engines, Messrs. Popular Garage is engaged in the business of "processing of goods". The finding of fact on that question should be arrived at by bearing in mind the connotation of the word "processing" that occurs in section 5 (1) (xxxii) of the Wealth-tax Act and the context in which it occurs. The Appellate Tribunal has not entered such a finding of fact, bearing in mind the correct perspective with which the matter should be viewed. But, it was s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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