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TMI Blog1967 (3) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... -tax Act in respect of the industrial undertaking for the manufacture of handloom fabrics at Ghaziabad is available to the assessee ? " The High Court answered the question in the affirmative. The Commissioner of Income-tax having obtained certificate from the High Court under section 66A(2) of the Indian Income-tax Act, 1922, the appeal is now before us. The learned counsel for the revenue contends that the High Court has disregarded the findings of fact made by the Appellate Tribunal and itself arrived at certain findings of fact and on the basis of those findings has answered the question. It is common ground that the High Court has no jurisdiction to do so. Let us then consider whether the High Court has in fact disregarded any of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding, machinery or plant used in a business which was being carried on before the 1st day of April, 1948 ; (ii) has begun or begins to manufacture or produce articles in any part of the taxable territories at any time within a period of thirteen years from the 1st day of April, 1948, or such further period as the Central Government may by notification in the official gazette specify with reference to any particular industrial undertaking ; . . . ." From the order of the Appellate Tribunal. it would appear as if the Appellate Assistant Commissioner had given some categorical findings, but when we go through the order of the Appellate Assistant Commissioner it appears that it is not so. What happened was that the Income-tax Officer in his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... starting of a new kind of work at Ghaziabad. But the Appellate Assistant Commissioner remanded the case with direction that the Income-tax Officer should consider all the points raised by the counsel before him and before the Appellate Assistant Commissioner, and he should visit the Ghaziabad factory to properly appreciate the position. The Income-tax Officer reported his findings. He found that the powerlooms which were acquired by the Ghaziabad factory had never worked at Ghaziabad and some of them were found lying in the form of junk in a remote corner of the factory premises. As far as the cloth looms are concerned, he reported : " It has been contended that these were being used before 31st March, 1948, on experimental basis to see ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for exemption as follows : The assessee's case for exemption under section 15C rests on the point that the production of goods at Bela Road factory was only on experimental basis and was not in the course of regular business of the assessee which was proposed to be carried on. It is claimed that the limited company was incorporated to manufacture handloom furnishings on the model of those manufactured by its South India counter-part and goods as the company had not at its disposal a regular bleaching plant or dyeing plant. Therefore the Common-wealth Trust Ltd. refused to sell these unstandard goods. The assessee wants to press that since the goods produced by it were not up to the mark, it should be held that they had not started produci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat during these months they had to consume the quota of yarn allotted to them monthly has not much force as the fact remains that the manufacture was carried on. The factory had begun to manufacture articles before 1st April, 1948, and, therefore, is not entitled to the exemption laid down under section 15C." It would be noticed from the order of the Appellate Assistant Commissioner that he did not reject the contention of the assessee, which the Income-tax Officer had apparently accepted, i.e., that a pilot project had been set up by the assessee. He further found that because the total production amounted to Rs. 67,085, it could not be described as " pure experimental production." It is difficult to understand the exact import of the w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal which has not expressed any opinion either as to whether the manufacture in 1947, was by way of experiment and training, but has based its decision entirely on the fact that some looms were transferred to the new factory. I therefore do not consider that I am precluded from expressing the opinion that the fact that sales amounted to Rs. 67,000 in 1947, in no way rebutted the contention of the assessee that the production at the Bela Road factory of one simple kind of cloth was by way of experiment and training, and this opinion is supported by the fact that in the fourth year of production of the new factory sales had risen to Rs. 15,00,000." The High Court then concluded : " In my opinion a provision of this kind which is int ..... X X X X Extracts X X X X X X X X Extracts X X X X
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