Development rebate allowed on assets sold to Government - Whether not liable to be withdrawn even if vendor credits to profit and loss account reserve which he had originally crea
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Development rebate reserve condition: misuse of the reserve triggers withdrawal of the rebate even after sale to government. Section 34(3)(a) conditions the allowance of development rebate on crediting a portion to a reserve and prohibiting its utilisation for distribution, remittance as profits, or creation of assets abroad for a statutory period; utilisation or transfer of that reserve into capital or profits contrary to those prohibitions results in forfeiture and withdrawal of the rebate, and the proviso shielding certain asset transfers does not excuse breach of the reserve-use requirement.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Development rebate reserve condition: misuse of the reserve triggers withdrawal of the rebate even after sale to government.
Section 34(3)(a) conditions the allowance of development rebate on crediting a portion to a reserve and prohibiting its utilisation for distribution, remittance as profits, or creation of assets abroad for a statutory period; utilisation or transfer of that reserve into capital or profits contrary to those prohibitions results in forfeiture and withdrawal of the rebate, and the proviso shielding certain asset transfers does not excuse breach of the reserve-use requirement.
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