9911796707
TMI Blog1967 (12) TMI 13X X X X Extracts X X X X X X X X Extracts X X X X ..... interim order pending the first writ petition, but permitted him to proceed with the reassessment. The assessee, who is the petitioner, is a registered partnership carrying on business in the manufacture and sale of yarn in Tirunelveli town. For the assessment year 1959-60 the firm filed a return showing a net loss of Rs. 90,958, the accounting year therefor having ended on December 31, 1958. This result was arrived at after deducting depreciation and development rebate. The development rebate as claimed was allowed. It appears the Assistant Accountant-General in his audit report dated December 4, 1964, pointed out that the development rebate in respect of machinery purchased and installed after January 1, 1958, had been allowed in the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Income-tax Officer referred to the fact that no reserve had been created in the accounts as required by the statutory provision, that subsequent creation of such reserve was not sufficient compliance and that, therefore, the development rebate originally allowed should be disallowed. On that view he added a sum of Rs. 86,754 to the assessment. It is contended before us for the assessee that it had in the original assessment proceedings placed all the primary facts before the Income-tax Officer, and that there was no omission on its part which could at all have resulted in any under-assessment. What the petitioner disclosed before the Income-tax Officer at the time of the original assessment was this. Along with the return it separately ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quired under the proviso to section 10(2)(vib) were not furnished along with the return in the original assessment proceedings. It is admitted that no, separate reserve as for development rebate has been created. Clause (b) of the proviso requires that before a claim for development rebate could be allowed, it is necessary that an amount equal to 75% of the development rebate to be actually allowed is debited to the profit and loss account of the relevant previous year and credited to a reserve account to be utilised by the assessee during a period of ten years next following for the purpose of the business of the undertaking. All that the assessee did was to debit the profit and loss account with the entirety of the development rebate and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e facts already before the Officer. It is strenuously argued before us by Mr. Balasubrahmanyan for the revenue that this was clearly a case of commission on the part of the assessee to file the balance-sheet which alone would have disclosed separate reserve in the accounts pertaining to development rebate. We fail to appreciate the argument. We are not satisfied that the filing of a balance-sheet would in any way have added to the primary facts which were already before the Income-tax Officer. As we mentioned, the facts on the face of them showed that the assessee was not entitled to allowance of the rebate claimed. Learned counsel for the revenue cited decided cases which interpreted section 34(1)(a) of the 1922 Act and section 147 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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