RAJESH BALIA,J. - (1.) HEARD learned Counsel for the parties.
(2.) THIS is an application under Section 256(2) of the IT Act, 1961 seeking that the order passed by the Tribunal, Jaipur Bench, Jaipur, on 20th May, 1998 in RA No. 56/Jp/1990 refusing to state the case and refer the following questions to this Court for its opinion by holding that these are not the questions of law, which arise out of its appellate order dt. 20th Jan., 1998, is erroneous: 1. Whether, on the facts and in the circumstances of the case, the Tribunal was legally justified in allowing the depreciation and investment allowance, when the commencement of production was not proved by the assessee ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was legally justified in allowing wages and interest paid to RFC, which also include personal interest, when the commencement of production was not proved and the claim was otherwise also inadmissible ? 3. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in giving the finding that assessee had commenced commercial production during the year under consideration ? The assessee had submitted a return of loss of Rs. 11,27,650 for asst. yr. 1988 -89, in respect of his income of previous year relating to the assessment year ending on 31st Dec, 1987. The business of assessee was stated to be of manufacturing electrodes. For the purpose of said business, it acquired machinery during the relevant year and installed the same in the previous year in question. The assessee had claimed depreciation in terms of Section 32 of the IT Act as well as investment allowance under Section 32A in respect of cost of aforesaid machinery amounting to Rs. 7,70,862 and Rs. 3,97,620, respectively. The assessee has claimed that he has used machinery for production of electrodes during the previous year and had started commercial production on 1st Oct., 1987.
(3.) OTHER facts which are relevant for the present purposes and about which there is no dispute, are that the assessee acquired machinery in question on 29th Sept., 1987 and he has purchased raw material from M/s Indian Rare Arts Ltd. through invoice No. 605 dt. 15th Oct., 1987, for which the order was placed on 29th Sept., 1987, that is on the same date machines were acquired. The assessee has also shown the sale proceeds of his production at Rs. 1,62,200 vide invoice dt. 22nd Dec, 1987 issued to M/s Suppliers India, Jodhpur.;