The exemption under Sec. 45(d) of the Wealth Tax Act, 1967, is available only to companies established with the specific object of carrying on an industrial undertaking in India, and not to companies whose object is merely to carry on business in India.

1. Under Sec.271(1) of the Wealth Tax Act (Central Act 27 of 1967)--hereinafter called the Act--the Appellant Income-tax Tribunal, Patna Bench, has referred to this Court the following question of law:

"Whether in the facts and circumstances, the assessee company was a company established with the object of carrying on an industrial undertaking in India and was as such entitled to exemption from wealth tax under Sec. 45(d) of the Wealth Tax Act?"

The facts stated in the statement of ease are these. The assessee is a foreign company operating in India in the name of Heckett Engineering Co. (India Branch), Division of Harsco Corporation (U.S.A.). For the wealth tax assessment for the year 1959-60 (the valuation date being 31-12-1958) the total net wealth of the company taxable under the Act was Rs. 29,85,115. There is no dispute as to the quantum of this valuation. Although, as it appears from the copy of the assessment order passed by the Wealth Tax Officer. Jamshedpur, no claim of exemption was made by the assessee company before him under Sec. 45(d) of the Act, such a claim was made before the Appellate Assistant Commissioner in appeal. It was, however, rejected by him on the ground that the assessee is not a company which is entitled to the exemption aforesaid. The same view was taken by the Appellate Tribunal when the assessee went up in further appeal before it.

2. The argument put forward on behalf of the assessee by Mr. Rajeshwari Prasad, its learned counsel, is that the assessee is a company within the meaning of Sub-clause (ii) of Clause (h) of Sec.2 of the Act and hence, in terms, it is entitled to the exemption provided in Clause (d) of Sec. 45, inasmuch as the company established its place of business in India in the year 1956 with the object of carrying on an industrial undertaking in India or, in any view of the matter. It was a company established with the object of carrying on an industrial undertaking in India at the time of its incorporation in the United States qn the 28th of February 1956 Counsel submitted that both the periods aforesaid were within the exemption limit of five successive assessment years as provided in the proviso to Clause (d) of Sec. 45 of the Act. The learned Standing Counsel for the department combated this argument and submitted that the fact of establishment of a place of business by the assessee company in India for carrying on an industrial undertaking is not one which would attract the provisions of exemption and the company was not established, that is to say, incorporated in the United States, with the object of carrying on an indus trial undertaking in India within the meaning of exemption clause.

3. Sec.2(h) says :

"(h) Company means a company as defin ed in Sec.3 of the Companies Act, 1956, and includes: (i) a company within the meaning of any law in force in the State of Jammu and Kashmir relating to companies: and

(ii) a company incorporated outside India which has a place of business in India."

Under Section 8 of the Act, the wealth of the foreign eompany which has a place of business in India would be taxable. Sec. 45 of the Act provides:

45. The provisions of this Act shall not apply to- (a) a banking company as defined in Sec. 5 of the Banking Companies Act, 1949;

(b) an insurer within the meaning of the Insurance Act, 1938;

(c) any company established with the object of financing whether by way of making loans or advances to, or subscribing to the capital of, private industrial enterprises in India, in any case where the Central Government has made or agreed to make to the company n special advance for the purpose or has guaranteed or agreed to guarantee the payment of moneys borrowed by the company from any institution outside India;

(d) any company established with the object of carrying on an industrial undertaking in India in any case where the company is not formed by the splitting up, or the reconstruction of a business already in existence or by the transf