1980 (1) TMI 57

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....ing to Rs. 82,542. For this purpose, the assessee created a development rebate reserve of Rs. 61,906. The assessee's claim for development rebate was accepted in that assessment year. Later on, it came to the notice of the ITO that the development rebate reserve amounting to Rs. 61,906, which was created during the accounting period ending 31st December, 1963, was distributed by way of profits and credited to the capital accounts of the partners during the accounting period ending 31st December, 1971, i.e., before the expiry of 8 years. Consequently, the ITO came to the conclusion that the assessee infringed the provisions of s. 34(3)(a) of the Income-tax Act, 1961 (hereinafter referred to as " the Act "), and hence the development rebat....

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....d by the assessee. It has so been authoritatively held by their Lordships of the Supreme Court in Indian Overseas Bank Ltd. v. CIT [1970] 77 ITR 512. As regards the factual position, the Tribunal found as a fact that the entries regarding the transfer of the development rebate reserve to the capital account of the partners were made on 31st December, 1971, and the plea that the said entries, were made on a later date, was negatived. That being so, the development rebate reserve was not kept intact for the full period of 8 years, which is required under the statutory provisions referred to in the earlier part of the order. Thus, no fault can be found with the order of the income-tax authorities sought to be impugned. The other contention ....