Commencement of manufacture for tax relief turned on whether trial production in 1951 was commercial or merely experimental.

For relief under section 15C of the Indian I.T. Act, 1922, the relevant date was when manufacture or production first commenced, because the exemption ran for five successive assessment years from that point. Trial manufacture would not be excluded merely because it was experimental, but the assessee had to prove that the 1951 activity was only for testing and not for commercial use. As no material was produced to show that the goods made in 1951 were not for commercial use, production was treated as having commenced in 1951. Relief was therefore unavailable beyond the assessment year 1956-57, and the question was answered against the assessee.

---

---

Issues: Whether production commenced by way of trial manufacture in 1951 amounted to commencement of manufacture or production for the purpose of section 15C of the Indian I.T. Act, 1922, so as to determine the first and last assessment years for relief.

Analysis: Relief under section 15C depended on the year in which the assessee first commenced manufacture or production, because the exemption was available for five successive assessment years from that point. Trial production, if not shown to be merely for testing or sampling and not for commercial sale, would not necessarily be excluded; however, the assessee bore the burden of proving that the 1951 activity was only experimental. No material was produced before the income-tax authorities to show that the goods manufactured in 1951 were not for commercial use. The finding, therefore, was that production had in fact commenced in 1951.

Conclusion: The assessee was not entitled to relief under section 15C beyond the assessment year 1956-57, and the question was answered in the negative.

---