Development rebate allowed on assets sold to Government - Whether not liable to be withdrawn even if vendor credits to profit and loss account reserve which he had originally created https://www.taxtmi.com/circulars?id=4446 The circular explains that a condition of the development rebate is creation of a reserve by debiting profit and loss and crediting a reserve subject to an eight-year prohibition on utilisation for dividends, remittance, or asset creation abroad. Utilisation of that reserve within the restricted period, including crediting it to proprietor's capital account after sale to Government, amounts to breach and requires withdrawal of the rebate. A proviso that mitigates penalties for transfer or sale does not condone breaches of the reserve-utilisation condition, which independently leads to forfeiture of the rebate. en-us Mon, 11 May 1970 00:00:00 +0530 Tue, 29 Jul 2008 17:13:00 +0530 TaxTMI RSS Generator Development rebate allowed on assets sold to Government - Whether not liable to be withdrawn even if vendor credits to profit and loss account reserve which he had originally created https://www.taxtmi.com/circulars?id=4446 The circular explains that a condition of the development rebate is creation of a reserve by debiting profit and loss and crediting a reserve subject to an eight-year prohibition on utilisation for dividends, remittance, or asset creation abroad. Utilisation of that reserve within the restricted period, including crediting it to proprietor's capital account after sale to Government, amounts to breach and requires withdrawal of the rebate. A proviso that mitigates penalties for transfer or sale does not condone breaches of the reserve-utilisation condition, which independently leads to forfeiture of the rebate. Circulars Income Tax Mon, 11 May 1970 00:00:00 +0530 https://www.taxtmi.com/circulars?id=4446