1978 (7) TMI 62

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....s, Manipal, which is carrying on the business of printing and also carrying on business in book-binding. The assessee started an independent business of book-binding in the year 1967. In the assessment for that year, the ITO refused relief under s. 80J. During the assessment year 1969-70, when a similar claim was made that was also rejected. On appeal, the AAC held that the assessee was entitled to relief. But on further appeal to the Tribunal, the Tribunal called for a report from the ITO in regard to certain matters and, on receipt of such report, held that the assessee satisfied the requirements of s. 80J(4), cls. (ii), (iii) and (iv). But it held that the assessee did not satisfy the requirement of cl. (i) of sub.s. (4) and accordingly ....

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....o bore the cost of materials ? (iii) The number of workers employed ? (iv) When did the assessee start this business ? (v) Whether any agreement exists between the assessee and the other firm, M/s. Manipal Power Press, Manipal, for the work entrusted to the assessee by the latter. If there is any agreement what does it indicate regarding supply of materials ? (vi) Whether that agreement, if any, spells out the nature of the work entrusted to the assessee that it was one purely of labour work ? The ITO made a report as follows : (i) That the business of book-binding was started by the assessee on September 1, 1967, during the previous year ending March 31, 1968. This business had two units, one at Manipal and the other at U....

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....e; that it was manufacturing,or producing articles and the undertaking employed twenty or more workers in the manufacturing process carried on without the aid of machinery. However, it was of the opinion that the undertaking was formed by the splitting up of a business already in existence. The report of the ITO did not record such a finding and there was no material brought on record by the ITO to the effect that the new undertaking was formed by the splitting up of a business already in existence. In order to hold that there it a splitting up of a business already in existence, there must be some material to hold that either some asset of an existing business is divided and another business is set up from such splitting up of assets, o....