Commissioner of Income Tax vs Caristrap Ltd.

Bharucha, J.—The reference is made at the instance of the Revenue. It raises one question for the assessment year 1971-72. It reads thus :

"Whether, on the facts and in the circumstances of the case, the Income Tax Officer was justified in withdrawing development rebate of Rs. 35,601 allowed in the original assessment order even though the assessee-company had not created the full amount of development rebate reserve, viz., 75 per cent of the cost of plant and machinery of Rs. 83,482 during the previous year as required under the provisions of Section 33 read with Section 34 of the Income Tax Act ?"

In also raises two questions for the assessment year 1972-73 which reads thus :

"Whether, on the facts and in the circumstances of the case, the assessee-company is entitled to the set off of unabosrbed development rebate of Rs. 46,681 pertaining to the assessment year 1971-72 against the profits of the assessee for the assessment year 1972-73, even though it had not created any reserve in the accounting year relevant to the assessment year 1971-72 ?"

"Whether, on the facts and in the circumstances of the case the claim of the assessee-company for the allowance of development rebate amounting to Rs. 46,584 pertaining to the assessment year 1970-71 could be allowed against the profits of the assessee for the assessment year 1972-73 ?"

Counsel are agreed that the answer to be given to all the three questions is governed by the decision of this court in Indian Oil Corporation Ltd. Vs. S. Rajagopalan, Income Tax Officer, Companies Circle II(1), Bombay and Others, . Following that judgment, the only question for the assessment year 1971-72 is answered in the negative and in favour of the assessee. Both questions relating to the assessment year 1972-73 are answered in the affirmative and in favour of the assessee.

No order as to costs.