9911796707
TMI Blog1989 (7) TMI 156X X X X Extracts X X X X X X X X Extracts X X X X ..... d to claim and have investment allowance determined only in the asst. yr. 1979-80, which was the year in which the machinery was purchased, installed and not to use. He, therefore, held that such a claim cannot be put up in asst. yr. 1980-81 on the ground that the total income for the asst. yr. 1979-80 was a loss. Aggrieved by that order, the assessee went in appeal before the AAC and cited before the AAC the Board's circular No. 189 dt. 30th Jan., 1979, particularly the following observations of the said circular: "In a case where the total income is computed before allowing development rebate is a loss, there was no obligation to create any statutory reserve in that year, as no development rebate would actually be allowed in that year. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ew of this decision. Reliance was also placed on the decision of Gujarat High Court in the case of Bharat Vijay Mills Ltd. vs. ITO (1985) 45 CTR (Guj) 60 : (1985) 154 ITR 786 (Guj) wherein it was held that benevolent circulars issued by the CBDT, even if they deviate from the legal position, are required to be followed by the ITO since the circulars would go to the assistance of the assessee. Reliance was also placed on the decision of the Bombay High Court in the case of Tata Iron Steel Co. Ltd. vs. N.C. Upadhyaya Anr. (1974) 96 ITR 1 (Bom), wherein the decisions of the Supreme Court in the case of Navnit Lal C. Javeri vs. K.K. Sen (1965) 56 ITR 198 (SC) and Ellerman Lines Ltd. vs. CIT (1972) CTR (SC) 71 : (1971) 82 ITR 913 (SC) were r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the benefit of development rebate and if the condition is not satisfied, the deduction on account of development rebate cannot be claimed at all." According to this decision, development rebate can be claimed in the year in which reserve was created. Mere book entry has to be made before the P L A/c is finally drawn up. This is a condition for securing the benefit of development rebate and if the condition is not satisfied, the deduction on account of development rebate cannot be claimed at all. In the case of State Bank of Travancore, it was laid down by the Hon'ble Supreme Court that the circulars which are in the nature of concessions can always be prospectively withdrawn. In the case of Laxmichand Hirjibhai vs. CIT (1981) 21 CTR ( ..... X X X X Extracts X X X X X X X X Extracts X X X X
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