JUDGMENT Om Prakash, J.
1. At the instance of the Revenue, two following common questions relating to the assessment year 1974-75 have been referred by the Appellate Tribunal to this court under Section 27(1) of the Wealth-tax Act, 1957, for its opinion :
" 1. Whether the Income-tax Appellate Tribunal was correct in law in holding that fabrication of leather boots be regarded as manufacturing or processing of goods within the meaning of Section 5(1)(xxxii) of the Wealth-tax Act, 1957 ?
2. In case the answer to question No. 1 is in the affirmative, whether the Income-tax Appellate Tribunal was correct in law in holding that M/s. H. Maula Buksh Sons and Co. was an industrial undertaking within the meaning of Section 5(1)(xxxii) of the Wealth-tax Act, 1957, even though the firm did not manufacture the leather boots itself ?"
3. The assessees in both the cases are partners in the firm, M/s. H. Maula Buksh Sons and Co., which claims to be engaged in the manufacture of leather boots. In short, the claim of the assessees in these cases is that the aforesaid firm being engaged in the manufacturing and processing of leather boots, is an industrial undertaking within the meaning of Section 5(1)(xxxii) of the Act and, therefore, the assessee's interest therein is exempt within the meaning of Section 5(1)(xxxii) of the Act.
4. The claim of the assessees was opposed by the Revenue on the ground that the aforesaid firm is not engaged in the manufacture of leather boots itself but gets the boots manufactured on job basis from contract labourers to whom the aforesaid firm supplies the raw material and then makes payment of labour charges with reference to the pieces manufactured by them. The Tribunal accepted the contention of both the assessees observing :
" The firm was certainly not purchasing and selling the various articles supplied by it to the military. It had purchased the various raw materials and had supplied the various articles after getting them manufactured by contract labour. The firm was, therefore, clearly an industrial undertaking and the assessee was entitled to exemption under Section 5(1)(xxxii) of the Wealth-tax Act in respect of his share in the firm."
5. The only question for consideration is whether the activity of getting leather boots manufactured on job basis by the firm in which the assessees are partners, can qualify the firm to claim it as an industrial undertaking within the meaning of Explanation appended to Clause (xxxi) of Sub-section (1) of Section 5 of the Act. There is no need to dwell upon this issue any longer as this question came up before this court in CUT v. Radhey Mohan Naraiu [1982J 135 ITR 372 which, adverting to the Explanation appended to Clause (xxxi) of Sub-section (1) of Section 5, held that the activity of converting plain white cloth into printed and dyed bedspreads, scarves and garments, etc., entitled the concern to be treated as an industrial undertaking. In that case, the assessee was a partner in M/s. Radhey Mohan Narain Laxman Babu which was engaged in trading in printed cloth. The said concern had no fixed assets of its own and was getting its trade requirements of goods from others on job work basis. The firm's work itself did not involve manufacturing or processing work and consequently the claim of the assessee was rejected by the assessing authority. On those facts, this court held that the firm in which the assessee was a partner, was an industrial undertaking despite the fact that the firm got the cloth printed on job basis. Similar view was taken by this court in CWT v. Dinesh Prakash [1988] 173 ITR 520, following the decision in Radhey Mohan Narain's case [1982] 135 ITR 372 (All).
6. Following the aforesaid decisions, we hold that the firm in which the assessees are partners will be characterised as an industrial undertaking within the meaning of Section 5(1)(xxxii) of the Act despite the fact that it got the leather boots manufactured on job basis from others to whom the raw material was supplied and labour charges were paid on contract basis.
7. We, therefore, answer both the questions in the affirmative, that is, in favour of the assessee and against the Revenue.