COMMISSIONER OF INCOME TAX Vs. TATA LOCOMOTIVE AND ENGINEERING COMPANY LIMITED

JUDGEMENT

(1.) THE question of law referred for our decision is :

(2.) THE assessee is the Tata Locomotive & Engineering Co. Ltd., Bombay, and the assessment year is 1955 -56 corresponding to the accounting year ending March 31, 1955. THE circumstances under which the reference came to be made are briefly as follows :

(3.) THE company therefore appealed to the Appellate Assistant Commissioner against the order of the Income -tax Officer. It pointed out that all that it had undertaken in the year of account was the mere assembly of automobiles from imported parts and had not manufactured or produced automobiles within the meaning of those words in section 15C sub -section (2) (ii) and sub -section (6). THE Appellate Assistant Commissioner held that in the first place the assessee was not entitled at all to the exemption under section 15C, because the assessee had not earned a profit but the overall result of their business was a loss and, therefore, section 15C would not be attracted in the year under assessment. Nevertheless he also proceeded to decide the merits of the other question. He held that since the assembly of automobiles from imported parts "was merely the first stage in the company's scheme for the manufacture of automobiles, the company should be held to have begun to manufacture or produce articles during the accounting period relevant to the assessement under consideration."