Development allowance reserve calculation clarified: reserve must equal proportion of allowance actually permitted for tea plantation taxation. The circular clarifies that the reserve required under section 33A must equal 75% of the development allowance actually allowed to the assessee; for tea companies the reserve is to be computed on the portion of the allowance that is permitted for tax purposes rather than on the gross calculated planting cost, and the reserve must be debited to profit and loss and credited to a reserve account for later utilisation in the business.
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Provisions expressly mentioned in the judgment/order text.
Development allowance reserve calculation clarified: reserve must equal proportion of allowance actually permitted for tea plantation taxation.
The circular clarifies that the reserve required under section 33A must equal 75% of the development allowance actually allowed to the assessee; for tea companies the reserve is to be computed on the portion of the allowance that is permitted for tax purposes rather than on the gross calculated planting cost, and the reserve must be debited to profit and loss and credited to a reserve account for later utilisation in the business.
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