9911796707
TMI Blog1985 (8) TMI 88X X X X Extracts X X X X X X X X Extracts X X X X ..... ebate amounting to Rs. 1,38,244 in respect of certain machinery. However, this machinery was sold. The dates of purchase for various pieces of machinery are as follows : Dates of purchase 20-11-1972 10-12-1972 7-2-1972 4-8-1972 8-2-1973 The date of sale is 7-2-1981. The ITO withdrew the said development rebate under section 155 of the Income-tax Act, 1961 ('the Act') on the ground that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ight years and so the breach was only technical or venial. He further relied upon the decision of Nagpur Tribunal in the case of ITO v. Shakti Offset Works [1983] 3 ITD 451 where the Tribunal had held that the word 'year' in section 34(3)(a) meant calendar year. Therefore, according to him, the word 'year' could be given any other meaning than previous year such as Diwali year or co-operative year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd (b) of section 34(3) are reproduced below : "(a) The deduction referred to in section 33 shall not be allowed unless an amount equal to seventy-five per cent 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 eight years next following for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rve had been kept intact in a separate reserve but only at the end of the period of eight years the decision was taken by the assessee to merge it with the general reserve and even after it was merged it was not utilised for any of the prohibited purposes. It was because of these facts that the Court held that 'even if there was any breach of the implied condition of section 34(3)(a) the breach wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the eighth year in this way. There is no scope for reducing this period by the assessee changing his previous year. The period becomes fixed in the very first previous year in which the machinery is acquired or installed and thereafter it is a matter of only taking eight years without considering what the subsequent previous years are. There is no possibility of taking any other meaning for th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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