COMMISSIONER OF INCOME TAX Vs. VENKATESA MILLS LIMITED

JUDGEMENT

(1.) THE assessee, Sri Venkatesa Mills Limited, Coimbatore, is a limited company. THE assessee claimed investment allowance of Rs. 16,609 for the assessment year 1978-79 relatable to the previous year, viz., the calendar year 1977.

(2.) FOR the earlier two years, the assessee had claimed development rebate to the extent of Rs. 4,11,623. It was found that the development reserve was not adequate and the assessee had not complied with an opportunity given by the Income-tax Officer to make good the shortfall in the accounts for the calendar year 1977.

(3.) THE circular was found by the Tribunal to merely reiterate the earlier instruction issued in 1965. THE Tribunal was of the view that the creation of the reserve in the accounts of the current year was, therefore, good enough and the claim of the assessee for development rebate and investment allowance required to be considered in the light of this.