COMMISSIONER OF WEALTH TAX, MADRAS vs RAMARAJU SURGICAL COTTON MILLS, LTD.

The Supreme Court ruled that under Section 5(1)(xxi) of the Wealth Tax Act, 1957, the criterion for exemption is based on the commencement of operations for establishing a unit, which must precede the actual setting up of the unit. The Court held that the respondent was entitled to the claim for exemption as the operations for establishment were completed after the Act came into force, thus satisfying the conditions laid down in the statute. The High Court's decision favoring the assessee was upheld, and the Commissioner was barred from raising new questions not addressed by the Tribunal.