9911796707
TMI Blog1980 (1) TMI 57X X X X Extracts X X X X X X X X Extracts X X X X ..... rve of Rs. 61,906. The assessee's claim for development rebate was accepted in that assessment year. Later on, it came to the notice of the ITO that the development rebate reserve amounting to Rs. 61,906, which was created during the accounting period ending 31st December, 1963, was distributed by way of profits and credited to the capital accounts of the partners during the accounting period ending 31st December, 1971, i.e., before the expiry of 8 years. Consequently, the ITO came to the conclusion that the assessee infringed the provisions of s. 34(3)(a) of the Income-tax Act, 1961 (hereinafter referred to as " the Act "), and hence the development rebate allowed to the assessee during the assessment year 1964-65 was to be withdrawn in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me Court in Indian Overseas Bank Ltd. v. CIT [1970] 77 ITR 512. As regards the factual position, the Tribunal found as a fact that the entries regarding the transfer of the development rebate reserve to the capital account of the partners were made on 31st December, 1971, and the plea that the said entries, were made on a later date, was negatived. That being so, the development rebate reserve was not kept intact for the full period of 8 years, which is required under the statutory provisions referred to in the earlier part of the order. Thus, no fault can be found with the order of the income-tax authorities sought to be impugned. The other contention of the learned counsel for the assessee, that the transfer from the development rebate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isions cannot be overlooked by observing that the breach was technical or venial. We respectfully are not in agreement with the view taken by their Lordships of the Gujarat High Court in Vikram Mills' case [1976] 105 ITR 423 and in our view the moment the entries were made in the account books of the firm transferring the money lying in the development rebate reserve to the capital account of the partners of the firm, the development rebate reserve became non-existent, which is in violation of the condition imposed by s. 34(3)(a) read with s. 155(5) of the Act, and thus the assessee is not entitled to the benefit as has been rightly hold by the Tribunal. For the reasons recorded above, we answer the question referred to us in the affirma ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
