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TMI Blog1987 (3) TMI 75X X X X Extracts X X X X X X X X Extracts X X X X ..... ce of the assessee, the following question of law has been referred to this court by the Income-tax Appellate Tribunal, Cuttack Bench: " Whether, on the facts and in the circumstances of the case, the assessee was not entitled to set off and/or adjust the unabsorbed development rebate of Rs. 5,57,794 for the assessment year 1968-69 against the income of the present assessment year ? " The asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 72(2) of the Act provides that effect shall first be given to the provisions of subsection (1) where any allowance or part thereof is under section 32(2) of the Act which provides that unabsorbed depreciation shall be carried forward to be deemed to be the depreciation in the year of assessment. In section 72(2), no provision has been made in respect of the development rebate in spite of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manifestly unjust result is to be avoided. The Supreme Court observed (at page 339): " Where the plain literal interpretation of a statutory provision produces a manifestly unjust result which could never have been intended by the Legislature, the court might modify the language used by the Legislature so as to achieve the intention of the Legislature and produce rational construction. The task ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court in the decision in CIT v. Gujarat State Warehousing Corporation [1976] 104 ITR 1, the Karnataka High Court in the decision in Mysore Paper Mill Ltd. v. CIT [1979] 117 ITR 132 and the Kerala High Court in the decision in Calicut Modern Spinning and Weaving Mills Ltd. v. CIT [1985] 153 ITR 810 have held that the unabsorbed depreciation shall have precedence over the unabsorbed development reb ..... X X X X Extracts X X X X X X X X Extracts X X X X
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