NATIONAL PROJECTS CONSTRUCTION CORPORATION LIMITED Vs. COMMISSIONER OF WEALTH TAX

JUDGEMENT

(1.) SEC . 45(d) of the WT Act, 1957, falls for consideration in this case. It is necessary to read the said provision and the Explanation, which are as under :

(2.) THAT takes me to the principal question. As I have already said, the Tribunal did find that the manufacturing, etc., work undertaken by the assessee was of considerable magnitude for which purpose the assessee had set up large workshops at work - sites. The only condition prescribed by the Explanation to S. 45(d) is that the industrial undertaking should be "engaged in the manufacture, production or processing of goods or articles". It is not the condition that the goods should be produced for sale. An undertaking engaged in the manufacture of goods for its own use may, therefore, equally qualify for the exemption. The word "engage" may have variety of meanings depending on the context and setting in which it is used. Ordinarily the expression connotes doing of more than one act or one transaction. Continuity of action is implicit in the meaning of the word. It has also been used in the sense of being busy or conducting or devoting attention or effort or employing oneself. The words "engaged in the manufacture, production", etc., should normally, therefore, mean continuously occupied in the manufacture as a principal business as distinguished from an occasional participation or single act or casual employment or a mere supervision without physical participation. The extent of activity would be a relevant factor and if such activity is at an extended scale it may be suggestive of being "engaged" in manufacturing activity. In Regional Provident Fund CIT, Bombay vs. Shri Krishna Metal Manufacturing Co. AIR 1962 SC 1536 the Supreme Court was concerned with the interpretation of S. 1(3)(a) of the Employees' Provident Funds Act, 1952, which reads :

(3.) IF a factory is engaged simultaneously in different industrial activities and one of these is in relation to an industry specified in Schedule I, then it can be said that the factory is engaged in the industry specified in Sche -dule I. The fact that the factory is engaged in other industrial activities will not necessarily take it out of the purview of S. 1(3)(a). The broad test which may safely be applied in dealing with this question is : is the factory engaged in the industry specified in Schedule I from a business point of view ? and the answer to this question would generally give a satisfactory solution to the problem posed by S. 1(3)(a). Whether or not a factory is engaged in any industry specified in Schedule I would, thus, be a question of fact to be determined in the facts and circumstances of each case."