K.N.Seth, J. - (1.) In this reference under Section 27(1) of the W.T. Act 1957, the following question has been referred for the opinion of this court : "Whether, on the facts and in the' circumstances of the case, the Income-tax Appellate Tribunal was correct in law in holding that the firm, M/s. Radhey Mohan Narain Laxman Babu, was an industrial undertaking within the meaning of Section 5(1)(xxxii) of the Wealth-tax Act, 1957 ?"
(2.) The assessee is a partner in M/s. Radhey Mohan Narain Laxman Babu. For the assessment year 1973-74, the assesses claimed relief under Section 5(1)(xxxii) of the W.T. Act in respect of his interest in the firm. The WTO found that the said firm was engaged in trading in printed cloth, had no fixed assets of its own and was getting its trade requirements of goods from others on job work basis. The firm's work itself did not involve manufacturing or processing work and, consequently, he rejected the assessee's claim. On appeal, the AAC upheld the claim of the assessee. The Tribunal dismissed the appeal preferred by the Commissioner of Wealth-tax upholding the view taken by the AAC that the firm was an industrial undertaking.
(3.) Section 5(1) of the W.T. Act provides that subject to the provisions of Sub-section (1A) 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: "(xxxii) the value; as determined in the 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.";