Strict proof of exemption conditions defeats claim where machinery purchases and seller identity are not established.

Exemption under section 4-A of the U.P. Trade Tax Act depended on strict proof that the assessee satisfied the scheme conditions, including genuine acquisition of new machinery. The Tribunal found the disputed investment was not negligible in relation to the total investment, and that finding accorded with the earlier remand directions. The assessee also failed to prove the genuineness of the purchases or the identity of the seller, while the record showed the alleged selling concern was non-existent. In the absence of proof of a bona fide purchase and eligible investment, the claim for exemption failed, and the Tribunal was justified in rejecting it.

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Issues: Whether the assessee was entitled to exemption under section 4-A of the U.P. Trade Tax Act, 1948 on the basis of the claimed purchase of machinery and the plea that the disputed investment was negligible.

Analysis: The claim for exemption was held to depend first on the assessee establishing strict eligibility within the exemption scheme. The Tribunal had found that the disputed investment was not negligible in relation to the total investment, and that finding was consistent with the earlier remand directions. The assessee also failed to substantiate the genuineness of the purchases or the identity of the seller, and the material on record showed that the alleged selling concern was found non-existent. In the absence of proof of genuine acquisition of new machinery, no question arose of granting exemption on a liberal approach or of treating the purchases as having been made from an unregistered dealer without such a plea having been properly raised and proved.

Conclusion: The assessee was not entitled to exemption under section 4-A, and the Tribunal was justified in rejecting the claim.

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