1985 (12) TMI 122

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....val from the CBDT. Since the assessee had not received such approval the ITO took the period of 12 months ending on 27th Nov., 1974, as the previous year and computed the total income for the purpose of income-tax for the year under appeal. In the process of assessment, the assessee claimed development rebate. This development rebate was in respect of the plant and machinery, furniture and fittings, electric fans, etc. However, the ITO observed that "development rebate cannot be allowed as the assessee did not create the necessary reserve in this accounting year". This assessment was framed on 23rd March, 1978 and was challenged in appeal before the CIT(A) inter-alia on the issue of allowance of development rebate. 3. It appears that the....

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....n the result there was no proper consideration of the allowance of development rebate. In this way, when the issue came before the ld. CIT(A) he had to ask the assessee to quantify the claim which the ld. counsel for the assessee inadvertently restricted to an amount, which did not represent the entire claim of the assessee. The assessee is running a cinema called Smriti Cinema. Apparently, the development rebate reserve is to be allowed on plant and machinery which in the context will be inclusive of items like furnitures and fittings, electric fans and fitting etc. But insofar as the decision of the ld. CIT(A) concerned the issue has been determined only with regard to the cost of machinery. The assessee is in appeal before us and ordinar....