9911796707
TMI Blog1980 (9) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... t year is 1966-67. The assessee filed the return of income on February 17, 1967, declaring income of Rs. 30,506. The assessee did not file a copy of the profit and loss account or balance-sheet along with the return. The assessee also did not claim any particular amount as deduction by way of development rebate. The assessee, however, added a note making a request that development rebate as may be allowable may be given as a deduction. The development rebate to which this note referred related to installation of machinery in Nirmal Talkies, owned by the assessee. The machinery installed in the talkies was purchased for Rs. 71,386. The development rebate which is admissible at 25 per cent. of the cost works out to Rs. 14,277. The assessee fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the requirement contained in s. 34(3)(a) before be can be held to be entitled to claim development rebate. In other words, 75 per cent. of the development rebate to be actually allowed must be debited to the profit and loss account of the relevant previous year and credited to a reserve account as mentioned in s. 34(3)(a) for claiming the rebate. The question, however, is, whether if no reserve account is created at the time of filing of the return, can the assessee correct his accounts and create a reserve before the assessment for claiming the rebate. In Indian Overseas Bank Ltd. V. CIT [1970] 77 ITR 512 (SC), the Supreme Court dealt with the corresponding provisions of the 1922 Act, and held that a creation of the reserve is conditi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision in that case. As expressed by the Allahabad High Court, there is no statutory bar that a profit and loss account once prepared cannot be later amended. It is, therefore, open to the assessee to amend the profit and loss account and to create a reserve account as required by s. 34(3)(a) before the assessment for claiming the rebate. This view is further supported by s. 139(5) which permits an assessee to file a revised return in case he discovers any omission or any wrong statement in the return originally filed by him. In our opinion, the Tribunal was right in deciding in favour of the assessee that he was entitled to claim the rebate. For the reasons given above, we answer the question in the affirmative in favour of the assessee a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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