1. The sum and substance of all the grounds raised by the assessee in these appeals, pertains to the assessee's claim of exemption under Section 5(1)(xxa) of the Wealth-tax Act, 1957 ('the Act') in respect of the share holdings of the assessee in Doyen Gases (P.) Ltd. 2. When the assessee's claim was rejected both by the WTO and the AAC, she has come before the Tribunal to press the same. The learned Counsel for the assessee, Mr. O.P. Maghan, besides giving written arguments in respect of the assessee's claim, submitted that under Section 5(1)(xxa) read with Section 45(d) of the Act and looking to item 26 of the Ninth Scheduled of the Income-tax Act, 1961, it is unequivocally proved that the assessee's share-holding was in a concern which was manufacturing heavy chemicals and, therefore, claim of exemption in that regard is in order. He, besides originally producing number of authorities to explain the technical part regarding its claim, submitted photostat extract from the book A Complete Course in ISC Chemistry, Volume 1, by V.P. Saxena, 1982 edn. and placed his reliance on page 2.93 of the same. Similarly, also he produced photostat extract from Chambers Twentieth Century Dictionary edited by A.M. Macdonald, 1976 edn., page 602 (1-2). Also the assessee's learned Counsel relied on Law Lexicon and Legal Maxims, Vol. II, 1980 edn. at pages 1005-1006 (1-2). Besides, the assessee's learned Counsel drew our attention to photostat extract of Encyclopaedia of the Social Sciences, edited by Edwin R.A. Seligman, Vol. VII, Gossen's Industrial Relations Councils, pages 300-305 (1-6).
He also drew our attention to certain other course books of chemistry meant for ISC and Encyclopaedia Britannica, Vol. XIII, and on Annual Report of Directorate General of Technical Development, Ministry of Industry (DGTD), as per which the production of gas was considered as heavy chemical, and finally he submitted that, if actually he has been able to substantiate that the gases manufactured were heavy chemicals, the assessee's claim deserves to be allowed.
3. The learned senior departmental representative, Mr. R.K. Bali, on the other hand, besides relying on the orders of the two lower authorities, submitted that firstly it has not been substantiated on facts or found as such that the assessee produces the gases because, if Article and Memorandum of Association are perused, it also speaks of purchase and sale of gases. Then, he submitted that looking to item 26 in Ninth Schedule of the Income-tax Act, it is mentioned 'inorganic heavy chemicals'. According to him, it does not have adjective 'heavy' before 'chemical'. Whatever the learned Counsel for the assessee said, according to him, was for industry (sic) and he went on explaining the scientific formula giving weight of nitrogen and oxygen and submitted that the assessee's claim was not rightly allowed as it was not covered under heavy chemicals.
4. After taking into consideration the rival submissions and going thoroughly through the technical aspect of the matter, we are convinced that the assessee's share-holding was in a concern which was producing heavy chemicals, and looking to Section 5(1)(xxa) on the one hand, and Section 45(d), on the other hand, and item 26 of the Ninth Schedule, and the scientific definitions and meanings given by dictionary, Law Lexion and Legal Maxims and other books on the subject, the assessee's share-holding was in a concern which was producing or manufacturing heavy chemicals, as above said, and, therefore, the assessee should not have been denied benefit under Section 5(1)(xxa).
5. With this appeal, we had also heard some other appeals of Sh.
Bhartinder Singh, and Sh. Kanwar Digender Singh. We are passing the speaking order in this case and shall be following the same in other ones.
6. The dispute relates to the investment of the assessee-appellant in equity shares of the company known as Doyen Gases (P.) Ltd. with its head office at Delhi, which was established with the object of manufacturing industrial and commercial gases, such as oxygen and nitrogen. The assessee claimed that the gases manufactured by this company were covered by item 26 of the Ninth Schedule, as mentioned in clause (xxa) of Section 5(1) but both the lower authorities had denied the assessee's claim on the plea that the said company, Doyen Gases (P.) Ltd., was established to manufacture inorganic heavy chemicals.
The word 'inorganic', on which reliance was placed by the learned senior departmental representative, is not defined either in the Income-tax Act or the Wealth-tax Act, as such, reference was invited to literary books. For the question whether oxygen or nitrogen are inorganic gases, reference was made to a book styled as A Complete Course in ISC Chemistry. When we peruse the same, we find that at page 2.54 and 2.98, the learned author has included nitrogen and oxygen in inorganic chemistry. Coming to 'heavy chemicals' as to what it means, when we peruse Chambers Twentieth Century Dictionary, we find at page 602 that the word 'heavy' is defined as weighty, ponderous, etc. It is further defined that 'heavy chemicals' are those produced on a large scale for use in industry. This meaning is also supported by Venkataramaiya's Law Lexicon and Legal Maxims, wherein at pages 1005-1006 'heavy chemicals' is defined as including industrial gases.
Photostat copies of all these are placed on the assessee's compilation.
Similar is the meaning given by the author in Encyclopaedia of the Social Sciences, where at page 300 'heavy chemicals' is defined and described as 'in general include all those enterprises which turn out bulky chemicals cheap for unit of weight. It is further mentioned in the same that 'Usage and opinion vary considerably as to the specific industries possessing these general economic characteristics, but in most countries at the present time, the heavy chemicals industries include industrial gases'. Last of all, our attention was drawn to Annual Report of Directorate General of Technical Development (DGTD), in which under classification 'heavy chemicals', oxygen gas is included. The learned Counsel for the assessee, with Mr. Bhartinder Singh, who was present, unequivocally mentioned that production of the said company, Doyen Gases (P.) Ltd., is also accounted for in statistical data which is reflected in 1978-79 annual report of DGTD.When we peruse the Encyclopaedia Britannica and look to page 124 under the head 'Nitrogen and its compounds', we find that in commercial production and uses, gases are also included in 'heavy chemicals'.
Similarly, at page 814, under the head 'Oxygen Group Elements and their compounds', while discussing commercial production and use, oxygen is also taken as heavy chemical. All these above references, which are supported by the photostat copies placed on the assessee's compilation and original books having been seen by us, go to show that the word 'heavy' has bean used for indicating mass production. There is nothing like 'inorganic heavy chemicals', as contended by the learned senior departmental representative. Production in large quantity, i.e., in million cubic meters, and in contrast to the word 'heavy chemicals' under the head 'fine chemicals' at page 39, oxygen or nitrogen has not been included in 'fine chemicals' whereas the same have been included in 'heavy chemicals' at page 7. It is mentioned there that the production of fine chemicals is calculated in kg. only. When we come to the unit of million cubic meter, it presupposes gases, which are classified in 'heavy chemicals'.
7. There is hardly any ambiguity with that what the company was manufacturing in which the shares were held by the assessee, were heavy chemicals and we need not go to the alternative submission of the learned Counsel for the assessee that in case of any ambiguity, meaning beneficial to the assessee has to be adopted. According to us, there is neither any ambiguity nor confusion about the meaning of 'heavy chemicals'. Since the entire decision in this matter turns on the issue whether the gases manufactured by the assessee-company, in which she had shares, were heavy chemicals and we have held as such, the assessee is entitled to exemption under Section 5(1)(xxa) read with Section 45(d). The action of the two lower authorities is, therefore, hereby reversed.