Gist of decision :

The appellant, at the time of incurring the expenditure on capital issue, was already in business. Therefore, the said expenses are incurred after the commencement of the business. In such an eventuality, the appellant can claim amortization of the expenses only if it qualifies to be an ‘industrial undertaking’. In the absence of any definition provided under the IT Act, it would be admissible to find out the scope of this expression by resorting to its meaning in common parlance as understood by common persons or its natural and grammatical manner. Industrial undertaking is to be given the meaning which is understood in common parlance, and which should be interpreted widely. Therefore, commonsense approach will have to be adopted and those undertakings would qualify as ‘industrial undertakings’ which are involved in ‘manufacturing activity’. The activity of construction can, by no stretch of imagination, be treated as manufacturing activity as it does not amount to manufacture or production of an article or a thing. Therefore, the appellant is not an ‘industrial undertaking’ and, it is not entitled to deduction under s. 35D.