TaxTMI 
TaxTMI 
1989 (3) TMI 2
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.... ? (2) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in directing that the Income-tax Officer should determine the development rebate and such development rebate should be allowed to be carried forward and set off when profits are available and if, in that year, the assessee fulfils the necessary requirements for such allowance like creation of adequate reserve ?" The assessee is a limited company. It has a textile mill at Cambay in the State of Gujarat. For the assessment year 1962-63, the previous year being the Calendar year 1961, the assessee claimed that a sum of Rs. 1,26,233 should be allowed as development rebate under section 33 of the Income in Act, 1961. The Income-tax Officer rejecte....
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.... previous year and credited to a reserve account to be utilised by the assessee during a period of eight years next following for the purposes of the business of the undertaking, other than for distribution by way of dividends or profits or for remittance outside India as profits or for the creation of any asset outside India. The Finance Act, 1966, added an Explanation to this clause. The Explanation declared that the deduction referred to in section 33 could not be denied by reason only that the amount debited to the profit and loss account of the relevant previous year and credited to the aforesaid reserve account exceeded the amount of the profit of such previous year (as arrived at without making the deposit aforesaid) in accordance wi....
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....the Indian Income-tax Act, 1922, and there was no Explanation such as the one we have before us. Reference was made to the decision of this court in Indian Overseas Bank Ltd. v. CIT [1970] 77 ITR 512. In that case, however the question was whether the creation of a reserve in compliance with section 17 of the Banking Companies Act constituted sufficient compliance with the requirements of proviso (b) to section 10(2)(vib) of the Indian Income-tax Act, 1922. Reference has also been made to Addl. CIT v. Vishnu Industrial Enterprises [1980] 122 ITR 919 (All). We do not find it possible to agree with the view taken by the Allahabad High Court in that case that the development rebate reserve need not be created in the relevant previous year duri....
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....the assessee and it was pointed out that the expression "shall be allowed" in clause (a) of sub-section (1) of section 33 indicated that the development rebate is to be assessed and thereupon it becomes allowable, and that sub-section (2) of section 33 which provides for the allowance of development rebate mentions that the sum "to be allowed" by way of development rebate for the assessment year shall be only such amount as shall be sufficient to reduce the total assessable income to nil and the amount of development rebate to the extent to which it has not been allowed shall be carried forward to the following assessment years for eight subsequent years. Reference was also made to the distinction between the expressions "to be allowed" and....