2001 PLP 2378 (PTD)

ARIJIT PASAYAT, C.J.‑‑‑Heard. These two references have been made under section 27(1) of the Wealth Tax Act, 1957 (in short the "Act") by the Income‑tax Appellate Tribunal, Delhi Bench "A" (in short the "Tribunal"). Since identical questions are involved, the two cases are taken up together for disposal. The common question referred for the opinion of this Court is as follows: "Whether, on the facts and in the circumstances of the case, the Income‑tax Appellate Tribunal was legally correct in holding that the firm in which the assessee was a partner which, had been buying brass articles, getting them nickel or silver plated from parties doing job work and thereafter soldering and engraving such articles so as to make them fit for export as fancy articles, was engaged in the processing or manufacturing of goods as to qualify the assessee for exemption under section 5(1)(xxxii) of the Wealth Tax Act, 1957?" The factual position which needs to be noted is as follows: The assessee is a partner in 'a firm, Regal Trading Corporation. The business activities of the firm consist of buying brass articles from the market, getting them nickel or silver plated from parties doing job work for the assessee and thereafter soldering and engraving such articles so as to make them fit for export as fancy articles to foreign markets. As it was the assessee's stand that the firm is an exporter of such goods, the claim before the Revenue authorities was that the capital of the assessee with the said firm is exempt under the provisions of section 5(1)(xxxii) of the Act. The Wealth Tax Officer opined that the firm was not carrying on any manufacturing process and, therefore, the assessee is not entitled to the relief claimed. The Appellate Assistant Commissioner (in short the "AAC') also rejected the claim. In appeal before the Tribunal, first the case of the assessee. S.C. Sethi (W.T.R. No. 15 of 1982) was taken up. The Tribunal recorded the following factual finding: "On a very careful perusal of the provisions contained in section 5(1)(xxxii) of the Act read with the Explanation to clause (xxxii), we are of the opinion that the assessee is engaged in the processing of goods. It has been held by the Appellate Assistant Commissioner, which is not in challenge before us at the instance of the Revenue, that the firm in which the assessee is a partner is in fact buying various articles from different dealers in Moradabad, and then sends the same to various parties for plating, soldering and engraving. It has been explained to us in the Court that after the job work is done by the parties, the assessee finally assembles the parts, does the necessary soldering or gets them done and sells the products so made in the market by exports as products of its own. This process, in our opinion, is covered within the meaning given to the phrase, 'processing of goods' in the Explanation to clause (xxxi) which is also applicable to clause (xxxii) of subsection (1) of section 5 of the Act. In our opinion, therefore, the authorities below erred in refusing to give necessary exemption to the assessee in respect of his interest in that firm. We set aside the orders of the authorities below on this issue and direct the Wealth Tax Officer to compute the interest of the assessee in the firm arid‑exempt it ‑under section 5(1)(xxxii)." Following the said decision, the claim was allowed in A.N. Sethi's case which is the subject‑matter of adjudication in W. T. R. No.46 of 1982. Learned counsel for the Revenue submitted that the Tribunal has recorded a finding which is not factually established by the assessee. It is stated that no final activity which made the articles fit for export pursuant to any process of. manufacture or processing was undertaken. In spite of service of notice there is no appearance on behalf of the assessee: The conclusions of the Tribunal which have been quoted above are essentially factual, giving rise to no question of law. Therefore, we decline to answer the references. The references are accordingly returned unanswered M.B.A./973/FC?????????????????????????????????????????????????????????????????????????????????? Order accordingly