Processing of goods can qualify as an industrial undertaking, supporting wealth-tax exemption for a partner's interest.

Exemption under section 5(1)(xxxii) of the Wealth-tax Act was available because the partner's firm qualified as an industrial undertaking within the Explanation to section 5(1)(xxxi). The firm was found to be engaged in manufacturing ice and processing potatoes kept in cold storage. The expression "processing of goods" was treated as distinct from manufacture and broad enough to include adaptation of goods for a particular purpose. On that construction, the firm satisfied the statutory definition, and the exemption was available to the assessee.

---

---

Issues: Whether the assessee was entitled to exemption under section 5(1)(xxxii) of the Wealth-tax Act, 1957 on the footing that the firm in which he was a partner was an industrial undertaking within the Explanation to section 5(1)(xxxi) of the Wealth-tax Act, 1957.

Analysis: The exemption under section 5(1)(xxxii) depended on the firm satisfying the definition of an industrial undertaking in the Explanation to section 5(1)(xxxi). The finding recorded was that the firm was engaged in manufacturing ice and in processing potatoes kept in cold storage. The statutory expression "processing of goods" was treated as distinct from manufacture and as wide enough to cover adaptation of goods for a particular purpose. On that footing, the firm answered the description of an industrial undertaking.

Conclusion: The assessee was entitled to the exemption, and the answer to the reference was in the affirmative and in favour of the assessee.

---