SATISH CHANDRA, J. - (1.) AFTER the assessment under the WT Act for the asst. yrs. 1957-76 and 1976-77 was completed, the petitioner felt aggrieved at the non-grant of exemption under cl. (xxxii) of S. 5(1) of the Act and for certain other matters, She filed a revision under S. 25 (1) of the WT Act before the CWT, Allahabad. One of the grounds takesn was that the assessee should have been granted exemption in relation to her firm Khan Carpets under cl (xxxii) of S. 5 (1). This claim was repelled by the CWT as follows : "Under S. 5 (1)(xxxii) interest from those firms only are exempt which are Industrial Undertakings. The assessee is the partner in the firm Khan Carpets which carries on business of manufacture and sale of floor carpets. The manufacturing of carpets cannot be categorised as an Industrial Undertaking and as such this ground of the assessee fails and the revision petition is dismissed on this score." Clause (xxxii), aforesaid, applies to assets forming part of an "Industrial Undertaking" belonging to a firm in which the assessee is a partner. The explanation appended to cl. (xxxi) to S. 5 (1) provides as under; "Explanation: For the purposes of cl. (xxxa), this clause, cl. (xxxii) and cl. (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. It is clear that the term "Industrial Undertaking" inter alia, means an undertaking engaged in the manufacture or processing of goods. carpets undoubtedly are goods. Accoring to the CWT Khan Carpets carries on the business of manufacture and sale of floor carpets. Since that firm was carrying on the business of manufacture of goods, it was an "Industrial Undertaking" within meaning of cl. (xxxii). The CWT Apppears to have over-looked the Explanation to cl. (xxxi), which applies to the definition of the term 'Industrial Undertaking' occurring in cl. (xxxii) also.
(2.) THE learned counsel for the Department invited our attention on the facts alleged in the counter- affidavit to the effect that the petitioner had not raised this claim in the return filed by her and that the firm Khan Carpets was, in fact not carrying on the business of manufacturing carpets. This aspect of the matter has not at all been submitted before the CWT In the interest of justice we feel it proper to send the matter back to the CWT. In the result, the petition succeeds and is allowed. The findings given by the CWT with regard to ground No. (1) before him is set aside. The matter is sent back to the CWT for deciding it afresh in the light of the observation made above and in accordance with law. The petitioner will be entitled to her costs.;