1986 (3) TMI 28

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.....J.-The two questions which have been referred to this court at the instance of the Revenue under section 256(1) of the Income-tax Act, 1961, are as follows: " 1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the assessee was entitled to development rebate under section 33(1)(b) for the assessment years under review and that it should be carr....

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....e, carried forward to the following year. This court has held that carry forward of the development rebate is allowed only if the failure to create a reserve on the part of assessee is on account of the fact that there is no income available in the assessee's hands in the relevant year out of which the requisite reserve or any part of it could actually be created. This decision of this court has b....

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....ome Tax by Sampath Iyengar, Volume 11, page 1380. Inviting reference to the earlier circular of the Board dated October 14, 1965, the circular further states as follows in clause (b) : " In case where the total income computed before allowing the development rebate is a loss, there was no legal obligation to create any statutory reserve in that no development rebate would actually be allowed in....