Judgment :- THANIKKACHALAM J. At the instance of the Department, the Tribunal referred the following question, under section 27 of the Wealth-tax Act, 1957, for our opinion "Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was correct in law in holding that the assessee's claim under section 5(1)(xxxii) representing the investment of Rs. 1, 30, 373 (computed in accordance with rule 2(1) of the Wealth-tax Rules, 1957) as a partner in the firm of Messrs. Venkatachalam Pillai and Son, which purchases standard gold and old gold and manufactures jewels through outside agency is allowable ?" The assessee is a partner in the firm of Venkatachalam Pillai and Son and he is assessed under the Wealth-tax Act, 1957. For the assessment year 1978-79, the assessee claimed exemption under section 5(1)(xxxii) on Rs. 1, 30, 373 being the investment made in the firm. The business activity of the firm consists of sale of gold ornaments to a limited extent. Gold is given to the workmen/acharis for converting into ornaments with specific directions given by the assessee. The wages are paid to the goldsmiths. The Wealth-tax Officer denied exemption claimed under section 5(1)(xxxii) of the Act on the ground that the manufacturing and processing of gold was done by an outside agency. According to the Wealth-tax Officer, the assessee was not directly involved in the processing and manufacturing of the gold ornaments. On appeal, the Appellate Assistant Commissioner, following the decision of this court in Addl. CIT v. Chillies Export House Ltd. held that the firm, in which the assessee is a partner, is not an industrial undertaking. Aggrieved, the assessee filed a second appeal before the Appellate Tribunal. The Appellate Tribunal, relying upon its earlier decision in Wealth-tax Appeals Nos. 322 and 326/(Madras) of 1979 dated July 31, 1980, allowed the appeal of the assessee, holding that the assessee's interest in the firm is exempt under section 5(1)(xxxii) of the Wealth-tax Act. The Tribunal pointed out that the assessee is having control over the goldsmiths, who were engaged by the assessee for the purpose of manufacturing the ornaments. Thus, the appeal filed by the assessee was allowedBefore this court, learned standing counsel appearing for the Department submitted that the Tribunal was not correct in holding that the assessee is entitled to the benefit claimed under section 5(1)(xxxii) of the Wealth-tax Act. Thus, the appeal filed by the assessee was allowedBefore this court, learned standing counsel appearing for the Department submitted that the Tribunal was not correct in holding that the assessee is entitled to the benefit claimed under section 5(1)(xxxii) of the Wealth-tax Act. Learned standing counsel pointed out that the assessee is not directly involved in the manufacturing and processing activities. According to learned standing counsel, gold was given by the assessee to the goldsmith for manufacturing the ornaments, and for making the ornaments, wages were paid by the assessee. Therefore, according to learned standing counsel, the assessee has no control over the goldsmiths, who are making the ornaments. In support of his contention, learned standing counsel relied upon the decisions in CWT v. K. Lakshmi, in CWT v. V. O. Angadi Veeriah Chettiar and in C. Kadarkarai v. CWT On the other hand, none was present on behalf of the assessee. We have heard learned standing counsel for the Department and perused the records carefully. The fact remains that the assessee is a partner in a partnership firm and the partnership firm was doing business in selling gold ornaments. The assessee claimed exemption under section 5(1)(xxxii) of the Wealth-tax Act, on the ground that the assessee-firm is an industrial undertaking, engaged in manufacturing and processing of ornaments. It remains to be seen that the assessee used to give gold to the goldsmiths for making ornaments and the assessee used to pay wages for such goldsmiths who are making the ornaments. The assessee is not having any control over the goldsmiths, who were engaged in making the ornaments. Therefore, according to learned standing counsel, the assessee is not an industrial undertaking engaged in manufacturing and processing of goodsReliance was placed upon a decision in CWT v. V. O. Angadi Veeriah Chettiar. According to the facts which arose in the aforesaid decision, the assessee therein was a partner in two firms, O and A. The firm, O, purchased grey yarn and got it bleached for charges by the other firm, A. The claim of the assessee for exemption under section 5(1)(xxxii) of the Wealth-tax Act, 1957, in respect of his interest in the two firms was disallowed by the Income-tax Officer, but it was accepted by the Appellate Assistant Commissioner and the Tribunal. Under such circumstances, while considering the Explanation to section 5(1)(xxxii) of the Wealth-tax Act, 1957, on a reference, this court has held that the interest of the assessee in the assets of the firm O will not be entitled to exemption, but the assessee will be entitled to the exemption in respect of his interest in the assets of the other firm, A In C. Kadarkarai v. CWT, this court, while considering the provision of section 5(1)(xxxii) of the Wealth-tax Act, held that inasmuch as the assessee was engaged in processing the grey cloth by dyeing and printing, it manufactures and produces an article which is distinct from the grey cloth which is used as a raw material. Therefore, the activity which the assessee carried on is a manufacturing activity, in spite of the fact whether the grey cloth belongs to it or to its customers. Therefore, this court has held that the assessee therein is entitled to the benefit under section 5(1)(xxxii) of the Wealth-tax Act, 1957. According to the facts arising in this case, the partnership firm, in which the assessee is a partner, was doing business in selling the gold ornaments. The partnership-firm is not manufacturing or producing the goods, but gold was given to the goldsmiths for the purpose of making the ornaments and for making such ornaments, wages were paid by the firmTherefore, the assessee is not involved directly in manufacturing and processing of the gold ornaments. Hence, the firm, in which the assessee is a partner, is not an industrial undertaking. It was pointed out by the Tribunal that the partnership firm is having a direct control over the goldsmiths, who were engaged in manufacturing the ornaments. But, on the facts, it was found by the assessing authorities that the assesseefirm is not having any control over the goldsmiths, to whom gold was entrusted for the purpose of making ornaments. Since, on the facts, the Wealth-tax Officer and the Appellate Assistant Commissioner came to the conclusion that the assessee was not directly involved in the manufacturing or processing of the gold ornaments, we consider that the Tribunal was not correct in holding that the assessee was entitled to the benefit under section 5(1)(xxxii) of the Wealth-tax Act Accordingly, we answer the question in the negative and in favour of the Department. Since the assessee is not represented, there will be no order as to costs.