Ajit K.Sengupta, J. - (1.) In this reference under Section 27(1) of the Wealth-tax Act, 1957, the Tribunal has referred the following common question for the assessment years 1979-80 to 1982-83 for our opinion : "Whether, on the facts and in the circumstances of the case, the Tribunal is justified in law in holding that the assessee is entitled to the exemption under Section 5(1)(xxxii) of the Wealth-tax Act, 1957, in respect of his investment as a partner in the firm, Messrs. Madgul Udyog, which is engaged in the business activity of construction and sale of multi-storeyed buildings consisting of flats ?"
(2.) Shortly stated, the facts are that the assessee, on the relevant valuation dates, was a partner of a firm, Messrs. Madgul Udyog, engaged in the business of construction and sale of multi-storeyed buildings. The assessee claimed that the investments in the said firm were exempted under Section 5(1)(xxxii) of the Wealth-tax Act on the ground that the firm being engaged in the construction of multi-storeyed buildings is an industrial undertaking within the meaning of the said provision. The firm set up a similar claim under Section 80J of the Income-tax Act but the Income-tax Officer did not accept the firm as an industrial undertaking. Consequently, the claim of exemption under Section 5(1)(xxxii) of the Wealth-tax Act was also denied to the assessee.
(3.) Being aggrieved, the assessee challenged the above order in appeal before the Deputy Commissioner of Income-tax (Appeals) and contended that the Tribunal, in the case of the firm, held the firm to be an industrial undertaking for the purpose of Section 80J of the Income-tax Act, vide its order dated September 4, 1986, in Income-tax Appeals Nos. 720 to 722 and 2037/(Cal) of 1985. The Deputy Commissioner of Income-tax (Appeals), following the said order of the Tribunal, directed that exemption under Section 5(1)(xxxii) of the Wealth-tax Act be allowed to the assessee.;