TMI Blog1982 (1) TMI 35X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Indian I.T. Act, 1922 ? " The facts giving rise to this reference are as follows : The assessee, a company, was incorporated on 3rd May, 1957, and is engaged in the manufacture of aromatic chemicals, perfumery compounds and so on. It started its manufacturing activities in 1959. For this purpose it had to instal machinery worth Rs. 7,28,000. Machinery worth Rs. 75,000 was transferred by Tata Oil Mills Co. Ltd. to the assessee and the rest of the machinery was newly purchased by the assessee. Ultimately out of the machinery of Rs. 75,000 transferred by Tata Oil Mills Company Limited, machinery worth Rs. 36,000 was returned to Tata Oil Mills Co. Ltd. Tata Oil Mills Co. Ltd. was carrying on business in the manufacture of perfumery, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bunal, it was contended by the assessee that the assessee-company had not been formed by the use of the second hand machinery worth Rs. 75,000 and that a considerable part of it, in fact, had been returned without affecting the manufacturing activity of the assessee. It was urged that the assessee-company had been formed really by purchasing a large block of new machinery worth Rs. 7 lakhs and odd. It was urged by the department that in view of the purchase and use of the said second hand machinery worth Rs. 75,000 by the assessee at the time of the formation of its undertaking, it must be held that the undertaking of the assessee was formed by the transfer to it of machinery previously used in another business. The Tribunal accepted the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... worth Rs. 75,000 was utilised therein. In fact, a substantial part of the said old machinery, which was transferred, has been returned by the assessee to Tata Oil Mills Ltd, from whom it had been transferred without affecting the manufacturing activity of the assessee. From these facts, the Tribunal has drawn the conclusion that the old machinery transferred, which was used in the formation of the said industrial undertaking was not of such importance that it could be said that the said industrial undertaking had been formed by the transfer of the said used machinery. We fail to see how the Tribunal can be said to have gone wrong in that conclusion and, in any event, the said conclusion is a conclusion of fact, there being no question befor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s resold by the assessee and the other portion was not used in the business but kept idle. (2) A rotary tablet-making machine was purchased by the assessee for Rs. 19,601 on 18th November, 1958, three months after the production of goods by the assessee was commenced. The industrial undertaking could not be regarded as having been formed by the use of that machine. (3) reconditioned tablet-making machine of the value of Rs.2,987 was purchased from Kilburn Co. Pvt. Ltd. It was held that out of the machinery of the value of Rs. 58,003, the said tablet-making machine was of insignificant value and even if its user is assumed, it will not affect the claim for exemption and the contention of the Revenue that the benefit of s. 15C(2) was not av ..... X X X X Extracts X X X X X X X X Extracts X X X X
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