| Case ID |
5c7f36de-9ce1-4eae-80d2-741c2bde63a3 |
| Body |
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| Case Number |
TAX CASE No. 209 OF 1959 |
| Decision Date |
Mar 14, 1962 |
| Hearing Date |
|
| Decision |
The court held that the exemption under section 5(1)(xxi) of the Wealth Tax Act, 1957, could be claimed only for new and separate units set up after the commencement of the Act. The assessee had laid out a total sum of Rs. 1,43,727 for constructing a new spinning unit, but operations for establishing the unit commenced before the Act came into force. Therefore, the exemption claim was disallowed. The court emphasized that the term 'set up' should be interpreted as 'ready to commence business' and ruled in favor of the assessee, stating that the claim for exemption should have been allowed. The decision concluded that the department would pay the costs to the assessee. |
| Summary |
This case revolves around the interpretation of the Wealth Tax Act, 1957, specifically section 5(1)(xxi), concerning exemptions for new industrial units. The crux of the case was whether the new spinning unit of Ramaraju Surgical Cotton Mills Ltd was considered 'set up' after the commencement of the Act. The court analyzed the timelines of construction and operational readiness, determining that while initial investments were made before the Act, the unit was not operational until after the Act's enforcement. This judgment is critical for businesses seeking tax exemptions under similar provisions, highlighting the importance of operational commencement dates in tax law. Keywords: Wealth Tax, Industrial Units, Tax Exemptions, Business Operations, Legal Interpretation. |
| Court |
Madras High Court
|
| Entities Involved |
Commissioner of Wealth Tax,
Ramaraju Surgical Cotton Mills Ltd
|
| Judges |
Jagadisan,
Srinivasan
|
| Lawyers |
Not available
|
| Petitioners |
Ramaraju Surgical Cotton Mills Ltd
|
| Respondents |
Commissioner of Wealth Tax
|
| Citations |
1962 SLD 212,
(1962) 46 ITR 820
|
| Other Citations |
Western India Vegetable Products Ltd. v. Commissioner of Income-tax [1954] 26 ITR 151
|
| Laws Involved |
Wealth Tax Act, 1957
|
| Sections |
27
|