Commencement of manufacture for tax relief depends on commercial production by the undertaking, not experimental output or incidental activity.

Relief under section 84(7) turns on when the particular licensed industrial undertaking first begins commercial manufacture or production of the relevant articles. Trivial, experimental, or incidental output does not amount to commencement, even if there is some limited sales activity, low power use, or modest wages. On that basis, the relevant undertaking was treated as having started manufacture only after 1 April 1958, and the four-year relief period was computed from the first effective assessment year, 1959-60. Assessment year 1963-64 therefore fell within the permissible period for relief.

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Issues: (i) Whether the assessee's undertaking had begun to manufacture or produce articles before 1 April 1958 so as to restrict relief under section 84 of the Income-tax Act to the earlier assessment years; (ii) Whether the first assessment made for 1959-60 controlled the computation of the four-year relief period under section 84(7) for assessment year 1963-64.

Issue (i): Whether the assessee's undertaking had begun to manufacture or produce articles before 1 April 1958 so as to restrict relief under section 84 of the Income-tax Act to the earlier assessment years.

Analysis: The relief under section 84(7) depends on when the particular industrial undertaking begins to manufacture or produce articles. The relevant undertaking was the licensed undertaking for manufacture of lathes and bench grinders, and not the company in the abstract or any incidental activity. The production before 31 May 1958 was found to be trifling, largely experimental, and not on a commercial scale. The limited sales, low electricity charges, modest wages, and insignificant value of the articles produced did not establish that the undertaking had commenced regular manufacture of the relevant articles before 1 April 1958.

Conclusion: The undertaking must be treated as having commenced manufacture only after 1 April 1958, and the assessee is entitled to relief for the assessment year 1963-64.

Issue (ii): Whether the first assessment made for 1959-60 controlled the computation of the four-year relief period under section 84(7) for assessment year 1963-64.

Analysis: The statutory reference point is the previous year in which the undertaking begins to manufacture or produce articles, and the computation must be made with reference to that year. Since the earlier activity did not amount to commencement of manufacture by the undertaking in a relevant sense, the first effective assessment year for section 84(7) was 1959-60. On that basis, the assessment year 1963-64 fell within the permissible four-year period.

Conclusion: The assessee's claim to relief for assessment year 1963-64 could not be denied on the ground that the first assessment year was 1958-59.

Final Conclusion: The reference was answered against the revenue on the substantive entitlement to relief and in favour of the assessee's claim for the assessment year in question, with costs to the assessee.

Ratio Decidendi: For section 84(7), the decisive date is when the particular licensed industrial undertaking begins commercial manufacture or production of the relevant articles; trivial, experimental, or incidental output does not amount to commencement for computing the relief period.

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