1. JUDGMENT : Satish Chandra, C.J. - After the assessment under the WT Act for the asst. yrs. 1975-76 and 1976-77 was completed, the petitioner felt aggrieved at the non-grant of exemption u/cl. (xxxii) of s. 5(1) of the Act for certain other matters. She filed a revision u/s 25(1) of the WT Act before the CWT, Allahabad. One of the grounds taken was that the assessee should have been granted exemption in relation to her firm M/s Khan Carpets u/cl (xxxii) of s. 5(1). This claim was repelled by the Commr. as follows :
"Under s. 5(1)(xxxii) interest from those firms only are exempt which are Industrial Undertakings. The assessee is the partner in the firm M/s Khan Carpets which carries on business of manufacture and sale of floor carpets. The manufacturing of carpets cannot be categoried as an Industrial Undertaking and as such this ground of the assessee fails and the revision petition is dismissed on this score."
Cl. (xxxii), aforesaid, applies to assets froming part of an "Industrial Undertaking" belonging to a firm which the assessee is partner. The explanation appended to cl. (xxxi) to s. 5(1) provides as under;
"Explanation : For the purposes of cl. (xxxa) this clause, cl. (xxxii) and cl. (xxxiv), the term "Industrial Undertaking : mean an undertaking engaged in the business of generation or distribution of electricity or any other form of power or in the construction of ships or in the manufacture or processing of goods or in mining."
It is clear that the term "Industrial Undertaking", inter alia, means an undertaking engaged in the manufacture or processing of goods. Carpets undoubtedly are goods. According to Commr., M/s. Khan Carpets carries on the business of manufacture and sale of floor carpets. Since that firm was carrying on the business of manufacture of goods, it was an Industrial Undertaking within meaning of cl. (xxxii). The Commissioner appears to have over-looked the Expln. to cl. (xxxi), which applies to the definition of the term Industrial Undertaking occurring in cl. (xxxii) also.
2. The ld. Counsel for the Department invited our attention to the facts alleged in the counter-affidavit to the effect that petitioner had not raised this claim in the return filed by her and that the firm M/s Khan Carpets was, in fact, not carrying on the business of manufacturing carpets. This aspect of the matter has not at all been submitted before the Commr. In the interest of justice we feel it proper to send the matter back to the Commr.
3. In the result, the petition succeeds and is allowed. The findings given by the Commr. with regard to ground No. (1) before him is set aside. The matter is sent back to the Commr. for deciding it afresh in the light of the observation made above and in accordance with law. The petitioner will be entitled to her costs.