TMI Blog1967 (3) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... m 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 the findings of the Appellate Tribunal. The difficulty has mainly arisen because the Appellate Tribunal wrote a very cryptic order. The order reads thus : " The facts have been correctly found by the Appellate Assistant Commissioner, and on those facts it is quite clear that the assessee's undertaking does not fall within items (i) and (ii) of sub-section (2) of section 15C inasmuch as the undertaking was partly formed by transfer to it of machinery and plant that had been used in a business carried on before 1st Apri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee for the year ending 31st March, 1948.... The above fact clearly shows that the assessee's claim under section 15C is untenable as it does not satisfy the condition laid down in section 15C(2)(i). Ghaziabad factory was started by the transfer to this place of machinery and plant which was used in business carried on before the 1st day of April, 1948. This being quite clear, it is needless to dilate on the further requirements of this section. It is significant to note here that the assessee did not put in this claim in any of the earlier assessments. " The assessee appealed to the Appellate Assistant Commissioner urging that the assessee was entitled to relief under section 15C in regard to the Ghaziabad factory. It was urged before the Appellate Assistant Commissioner that it was not a case of reorganisation but 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 rep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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 producing any goods as contemplated under section 15C. Further it is contended that as the regular production of Ghaziabad factory started production only after March, 1948, they were entitled to exemption under section 15C. On going through the correspondence, I find that the goods produced by the Bela Road factory were completed except to the extent that they were not bleached by the regular bleaching plant but by local dhobis etc., and as the local dhobis were not able to do expert work, the assessee chose to sell all the manufactured cloth through the canvassing agents of the Common-wealth Trust Limited, but without the labels of the said Trusts. This is apparent from a letter produced before me in which the Common-wealth Trust Limited agreed to sell the goods through its canvassers. I also find that the production of handloom cloth during the various months was as under : Rs. February 1947 14,348 March do. 30,254 April do. 11,692 Ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,000 in 1947, could not be described as purely experimental production. I find, however, that the Income-tax Officer accepted the fact that the production before the 1st of April, 1948, was experimental, and that the pilot plant consisting of the handlooms became the starting point of the enterprise. Moreover, what we are to consider is a question of law arising out of the final order of the Appellate 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 intended to encourage the setting up of new ind ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
