Commissioner of Wealth Tax vs Shyambihari Soni

Mohta, J.—This is an application under section27(3) of the Wealth-tax Act 1957 (''the Act'') for directing the Tribunal to state the case and to refer the following three questions, said to be of law, for the opinion of this Court:

"1. Whether, on the facts and in the circumstances of the case, the assessee was manufacturing or processing any goods as provided under wealth-tax and whether it can be termed as industrial undertaking ?

Whether in spite of non-furnishing of the details of the assets representing industrial undertaking before the Wealth-tax Officer which is a principal condition as provided in rule 2H of the Wealth-tax Rules, 1957 deduction u/s 5(1)(xxxi) can be allowed ?

Whether, on the facts and in the circumstances of the case, the assessee was entitled for deduction u/s 5(1)(xxxi) of the Wealth-tax Act, 1957 and the decision of the Appellate Tribunal in allowing the deduction was in accordance with the provision of law ?"

The assessee carries on the business of money-lending and dealing in silver ornaments. He purchases old ornaments and sells new. For the assessment years 1978-79 to 1980-81, he claimed deduction u/s 5(1)(xxxi) of the Act, on the ground that he was manufacturing or_ processing the silver ornaments. Undisputedly, he himself does not have manufacturing unit and gets the ornaments manufactured from outsiders as per his specifications. The WTO came to the conclusion that the assessee had no actual supervisory control over the processing or manufacturing. The said order was maintained in appeal, but reversed in second appeal by the Tribunal.

The Tribunal has held that getting the ornaments prepared as per specifications is by itself sufficient to attract section 5(1)(xxxi). Questions of law do arise out of the order of the Tribunal. In somewhat similar circumstances the Rajasthan High Court in the case of Commissioner of Wealth Tax Vs. Smt. Kanchan Devi Golecha, also took a similar view and directed the Tribunal to make a reference. In the circumstances, the present application is allowed. The Tribunal is directed to state the case and to refer the above questions for the opinion of this Court. Rule made absolute accordingly. No order as to costs.