TMI Blog1985 (12) TMI 45X X X X Extracts X X X X X X X X Extracts X X X X ..... spect of the capital of the assessee in the firm, M/s. Ratnalaya. Inquiries were made from the assessee as to whether the firm, M/s. Ratnalaya, was an industrial undertaking. The assessee filed reply stating that no registration of M/s. Ratnalaya, being an industrial undertaking, was necessary with the Industries Department, Jaipur. The assessee was then asked to give bifurcation of the assets that were employed for the purpose of processing, as laid down in rule 2H of the Wealth-tax Rules, 1957. No bifurcation was given by the assessee. The Wealth-tax Officer, after examining the case of the assessee, did not accept her claim for exemption under section 5(1)(xxxii) of the Act. Against the order of the Wealth-tax Officer, the assessee-no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion (1) of section 27 of the Act and required the Income-tax Appellate Tribunal to draw up a statement of the case and refer it to the High Court, for its opinion, on the question framed by the Revenue, which is as under : "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in upholding the findings of the Appellate Assistant Commissioner that M/s. Ratnalaya is an industrial undertaking and, therefore, the assessee is entitled to exemption under section 5(1)(xxxii) of the Wealth-tax Act, 1957, in respect of her capital employed in M/s. Ratnalaya." The Income-tax Appellate Tribunal did not agree with the Revenue and rejected the reference application under section 27(3) of the Act. Mr. Surolia, l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the assessee for the year 1976-77. According to him, while passing the assessment order for the year 1976-77, the Appellate Assistant Commissioner of Wealth-tax followed his earlier order which was not appealed against by the Revenue before the Tribunal, and in that order, M/s. Ratnalaya was held to be an industrial undertaking. Similarly, following the same order for the assessment year 1976-77, the Appellate Assistant Commissioner, while passing order for the assessment year 1977-78, held that M/s. Ratnalaya was an industrial undertaking, and the Tribunal upheld the order of the Appellate Assistant Commissioner. So, while passing order on the application filed under section 27(1) of Act, the Tribunal has opined that the order of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the employer does not engage any labourer. The labourers take goods for processing to their houses. They get money for the work done by them. So, the goods are taken by the persons for sorting out goods which are worth processing and seeing which part is worth further processing, for giving better shape, and, thirdly, they used to take the goods for polishing them at their houses. Therefore, the work done by the firm, M/s. Ratnalaya, is covered by the term, "industrial undertaking" argued Mr. Ranka. Mr. Ranka has fairly conceded that no doubt, the question as to whether M/s. Ratnalaya is an industrial undertaking or not, is certainly a question of law. But, according to him, every question of law is not referable to this court. So, he ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch is a further process. So, the work done by the firm, M/s. Ratnalaya, is certainly processing. However, as conceded by Mr. Ranka, this is certainly question of law as to whether the firm, M/s. Ratnalaya, is an industrial undertaking in the facts and circumstances of the case, and whether the assessee is entitled to exemption under section 5(1)(xxxii) of the Act, in respect of her capital invested in the firm, M/s. Ratnalaya, which needs further consideration. We, therefore, find that the order of the Income-tax Appellate Tribunal raises the following question of law: "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in upholding the findings of the Appellate Assistant Commissioner that M/s. Ratn ..... X X X X Extracts X X X X X X X X Extracts X X X X
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