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TMI Blog2017 (11) TMI 1607X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 143(3) read with Section 147. By a common order passed in appeals, the Tribunal allowed the appeal of the assessee in part and dismissed the appeal of the Revenue. 2. The assessee was aggrieved by reopening of the assessment under Section 147 as also disallowance of a claim of depreciation in respect of its clinker/cement factory at Gujarat. The assessee had claimed depreciation in respect of the machinery installed and put to use in the production of cement. A trial run was conducted for one day and the quantity produced was small. The assessee was apparently unable to establish that after the trial run, commercial production of clinker was initiated within reasonable time. According to the Assessing Officer, trial runs continued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d of December, 1960 / January, 1961. The plant was initially charged with raw material in February 1961, but the finished product was not in marketable state. The question before the Court was, on the aforesaid facts whether the assessee could have "set up" business by August, 1961 and therefore entitled to expenses incurred thereafter, as expenses incurred in the course of business. The Assessing Officer found that the erection of the plant was completed in the month of March 1961 and trials commenced which continued upto September, 1961 and expenses claimed came to be disallowed on the basis that this was expenditure only on experiments preparatory to the commencement of the business and not for carrying on the business. This Court therea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... verify the period of use and restrict depreciation to 50% if the Assessing Officer found that the machinery was used for less then 180 days during the year under consideration. 8. In facts of the present case, we find that the issue is no longer res integra in view of the decision of Industrial Solvents & Chemicals (P) Ltd. (supra). We have no hesitation in holding that the Order of the Tribunal cannot be faulted inasmuch as the jurisdictional High Court has already held that once plant commences operation and even if product is substantial and not marketable, the business can said to have been set up. Mere breakdown of machinery or technical snags that may have developed after the trial run which had interrupted the continuation of furth ..... X X X X Extracts X X X X X X X X Extracts X X X X
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