TMI Blog1994 (11) TMI 178X X X X Extracts X X X X X X X X Extracts X X X X ..... ot been set up during the relevant accounting year. The relevant facts are that the assessee is a limited company engaged in the business of manufacture and sale of motor cycles in collaboration with M/s Honda Motor Cycles ofJapan. The company was incorporated on19th Jan., 1984, and closed its books of accounts on30th April, 1985. This is, thus, the first year of assessee's business. The AO disallowed the assessee's claim of expenses incurred w.e.f.16th March, 1985, to the close of the previous year on the ground that the assessee had not started business production. The assessee went in appeal before the learned CIT(A), who on detailed examination of relevant facts and circumstances, as also independent evidence, came to the conclusion tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny motor-cycle for sale and trial production being not commercial production, the assessee was rightly disallowed its claim by the AO. The learned Departmental Representative quoted a number of judgments in support of her proposition including Gujarat High Court in the case of Addl. CIT vs. Speciality Papers Ltd. (1982) 133 ITR 879 (Guj) and CIT vs. Suhrid Geigy (1981) 25 CTR (Guj) 280 : (1981) 133 ITR 884 (Guj), in the case of CIT vs. Forging Stamping Ltd. (1979) 13 CTR (Bom) 127 : (1979) 118 ITR 616 (Bom), CIT vs. Industrial Solvent Chemicals (1979) 8 CTR (Bom) 124 : (1979) 119 ITR 608 (Bom) and in the case of Bhodilal Menghraj Co. vs. CIT (1979) 13 CTR (Bom) 101 : (1979) 119 ITR 968 (Bom) in the case of CIT vs. Food Speciality (198 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 16th March, 1985, with line off ceremony on 13th April, 1985, and licence obtained under the Central Excise Rules on 23rd April, 1985, and closing of accounts on 30th April, 1985. It was, thus, submitted that the assessee was geared to commence commercial production of motor-cycles and which actually started on27th May, 1985, but before that the assessee had already set up its business starting w.e.f.16th March, 1985, when trial production started. Shri Vohra submitted that the learned CIT(A) for himself verified the trial production commencing w.e.f.16th March, 1985, before he recorded a finding of fact that the assessee had set up its business during the relevant previous year w.e.f.16th March, 1985. Shri Vohra submitted that the Allah ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ), Sarabhai Management vs. CIT 1975 CTR (Guj) 111 : (1975) 102 ITR 25 (Guj), Prem Conductors Pvt. Ltd. vs. CIT 1976 CTR (Guj) 324 : (1976) 108 ITR 654 (Guj), CIT vs. Industrial Solvents Chemical CIT vs. Forgings Stamping Ltd., CIT vs. Ralliwolf (1979) 8 CTR (Bom) 129 : (1980) 121 ITR 262 (Bom) and Kanoria General Dealers. 5. We have heard the learned representatives of the parties. We have also gone through the relevant record, including the orders of the AO and that of the learned CIT(A). While the order of the AO in disallowing the claim of the assessee is very sketchy, we find that the learned CIT(A)'s order is not only detailed but well reasoned as well and his conclusions are based upon proper appreciation of relevant facts and c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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