9911796707
TMI Blog1988 (8) TMI 74X X X X Extracts X X X X X X X X Extracts X X X X ..... said section ?" The facts shortly stated hereinafter are as follows : The assessee in its return of income had claimed development rebate of Rs. 4,55,623 even though it had created a reserve of Rs. 1,46,566 only. During the course of the assessment proceedings, the Income-tax Officer, by his letter dated January 17, 1964, directed the assessee to create the necessary reserve as could be seen from the following extracts from the said letter : "The Income-tax Act, 1961, contemplates that the assessee has the obligation of computing his assessable profits and of making an adequate reserve of 75 per cent. of the development rebate actually allowable to him. The development rebate for the year according to your claim would be Rs. 4,55,623 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respect of the development rebate claimed: --------------------------------------------------------------------------------------------------------------------------------------------------- Development Development Development Development 75 per cent. rebate rebate actually rebate claim rebate made development claimable claimed c/f rebate reserve required --------------------------------------------------------------------------------------------------------------------------------------------------- Rs. Rs. Rs. Rs. Rs. --------------------------------------------------------------------------------------------------------------------------------------------------- 1961-62 4,55,623 1,57,894 2,97,729 1,46,566 1,18,421 1962- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... noticed that the assessee was in a position to create the entire amount of development rebate reserve as contemplated under section 34(3)(a) of the Act in respect of the development rebate claimed by it and since the assessee had created a reserve of Rs. 1,46,566 only, the development rebate allowable to the assessee should be restricted to the extent of the reserve created by it. Since this would amount to enhancement of the assessment, the Income-tax Officer gave an opportunity to the assessee by his letter dated April 19, 1967, to state its case as to why the mistake crept in the assessment should not be rectified under section 164 of the Act. The assessee in its reply dated April 26, 1976, objected to the proposed rectification of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... into the assessee's claim for deduction in respect of development rebate. After having protracted correspondence with the assessee, the Income-tax Officer had allowed development rebate to the tune of Rs. 4,30,111. In this view of the matter, we are in full agreement with the submissions made on behalf of the assessee that the action of the Income-tax Officer in the present appeal was based on mere change of opinion and that there was no glaring or apparent mistake in the assessment order originally passed by the Income-tax Officer." From the order of the Tribunal, it appears that as a matter of fact, the assessee created a reserve of Rs. 1,46,566 as against the requirement of Rs. 1,26,991. This finding of the Tribunal has not been challe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id excess amount as fresh reserve. It, however, made a representation to the Central Board explaining the I circumstances of the case and requesting the Board to issue necessary instructions to the assessing authorities to allow development rebate on the basis of the reserve already available. The Central Board of Direct Taxes issued instructions to the Department in favour of the assessee. The Appellate Assistant Commissioner issued instructions to the Income-tax Officer to grant the allowance. The Tribunal, however, held that the assessee was not entitled to the allowance because the instructions of the Central Board of Direct Taxes had been withdrawn. On a reference, it was held that the conclusion of the Tribunal was the result of a mis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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