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TMI Blog1990 (10) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... Reference No. 457 of 1968 deciding the following question of law in favour of the assessee and against the Revenue : "Whether, on the facts and in the circumstances of the case, the assessee can be said to have complied with the provisions of proviso (b) to section 10(2)(vib) of the Indian Income-tax Act, 1922, and was, therefore, entitled to allowance of development rebate on the plant and machinery installed after January 1, 1958. " It would be unnecessary to detail the facts which led to the framing of the question and the answer given. The dispute centered around the timing of the creation of the reserve known as the development rebate reserve. In CIT v. Veeraswami Nainar [1965] 55 ITR 35, the Madras High Court took the view that d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in that year. (c) Where there was no deliberate contravention of the provisions, the Income-tax Officer may condone genuine deficiencies subject to the same being made good by the assessee through creation of adequate additional reserve in the current year's books in which the assessment is framed. This led to a spate of litigation. Pressing Indian Overseas Bank's case[1970] 77 ITR 512 (SC), some taxing authorities in some cases took revisional and rectificatory actions. These reached various High Courts. The Gujarat High Court in Surat Textile Mills Ltd. v. CIT [1971] 80 ITR 1 opted for what may be called a narrow view in assuming that besides Explanation (a) reproduced above Explanations (b) and (c) as well stood wiped out by India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Board itself had clarified the matter, vide Circular No. 189 dated January 30, 1976 of which hint has been left earlier. The Board states to have re-examined the issue involved coming to the view that, except the clarification given in paragraph (a) above, which stood superseded by the decision of this court in Indian Overseas Bank's case [1970] 77 ITR 512, the clarifications given in paragraphs (b) and (c) quoted above hold good. It can thus legitimately be stated that the Board has itself opted for the view expressed in Tata Iron and Steel Co. Ltd.'s case [1974] 96 ITR 1 (Bom) and other cases of the kind taking the broader view in the matter. When the Board has itself opted for that view and that view is being followed by the income-tax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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