Processing of goods qualifies a textile printing business as an industrial undertaking for wealth-tax exemption.

Printing and sale of cotton sarees was treated as processing of goods and, on that basis, as an industrial undertaking for wealth-tax purposes. Earlier High Court rulings had already held that converting plain cloth into finished goods and carrying out printing and dyeing operations amount to processing of goods. Applying that principle, the business activity was held to fall within section 5(1)(xxxii) of the Wealth-tax Act, 1957, with the consequence that the assessee's interest in the firm qualified for exemption from wealth-tax.

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Issues: Whether a firm engaged in printing and sale of cotton sarees was an industrial undertaking engaged in the processing of goods within the meaning of section 5(1)(xxxii) of the Wealth-tax Act, 1957, so that the assessee's interest therein was exempt from wealth-tax.

Analysis: The question had already been settled by earlier decisions of the same Court holding that activities such as converting plain cloth into finished goods and carrying on printing and dyeing operations involve processing of goods and amount to an industrial undertaking for the purposes of section 5(1)(xxxii). Those authorities were applied to the present business of printing and sale of cotton sarees, which involved industrial processes of a similar character.

Conclusion: The assessee's interest in the firm was entitled to exemption under section 5(1)(xxxii) of the Wealth-tax Act, 1957, and the business activity constituted that of an industrial undertaking.

Ratio Decidendi: A business carrying on substantial processing operations in the manufacture or preparation of goods qualifies as an industrial undertaking for the purpose of wealth-tax exemption under section 5(1)(xxxii) of the Wealth-tax Act, 1957.

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