| Case ID |
36df123a-dcbb-4c9f-ba4d-aae52708a5d4 |
| Body |
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| Case Number |
WT REFERENCE No. 21 OF 1962 |
| Decision Date |
Dec 15, 1965 |
| Hearing Date |
|
| Decision |
The Punjab High Court ruled in favor of the assessee, Dalmia Dadri Cement Ltd., confirming that the company was entitled to the exemption under section 5(1)(xxi) of the Wealth-tax Act for the assessment year 1957-58. The court clarified that the term 'set up' refers to the completion or readiness for commissioning of a new unit, rather than the entire process from inception to completion. The court emphasized that the exemption applies to the portion of net wealth employed in a new industrial establishment set up after the commencement of the Act, provided the conditions of separate accounts and compliance with section 45 are met. The court also noted that the interpretation of 'set up' aligns with precedents, confirming that the unit was indeed ready for production in February 1958, thus qualifying for the exemption claimed. |
| Summary |
In the case of WT REFERENCE No. 21 OF 1962 before the Punjab High Court, the central issue revolved around the interpretation of the term 'set up' in relation to section 5(1)(xxi) of the Wealth-tax Act, 1957. The petitioner, Commissioner of Wealth Tax, challenged the eligibility of Dalmia Dadri Cement Ltd. for a wealth tax exemption regarding a new industrial establishment. The court ruled that 'set up' signifies the completion or readiness of the unit for production, confirming that the assessee commenced operations in July 1955 and was ready for production by February 1958, falling within the exemption criteria. This decision underscores the importance of precise language in tax law and the implications it has for industrial entities seeking exemptions. The ruling not only favored the assessee but also set a precedent for future interpretations of similar provisions under tax law, emphasizing the legislative intent to encourage industrial expansion. |
| Court |
Punjab High Court
|
| Entities Involved |
Commissioner of Wealth Tax,
Dalmia Dadri Cement Ltd
|
| Judges |
Mehar Singh,
P.C. Pandit
|
| Lawyers |
D.N. Awasthy,
B.S. Gupta,
N.N. Goswamy,
L.M. Suri
|
| Petitioners |
Commissioner of Wealth Tax
|
| Respondents |
Dalmia Dadri Cement Ltd
|
| Citations |
1967 SLD 172,
(1967) 63 ITR 158
|
| Other Citations |
Armitage v. John Haigh & Sons [1893] 9 TLR 287,
CWT v. Travancore Cements Ltd. [1964] 54 ITR 583 (Ker.),
K.C.P. Ltd. v. CWT [1967] 63 ITR 153 (AP),
Ramaraju Surgical Cotton Mills Ltd. v. CWT [1962] 46 ITR 820 (Mad.)
|
| Laws Involved |
Wealth-tax Act, 1957
|
| Sections |
5(1)(xxi),
45
|