COMMISSIONER OF INCOME TAX Vs. RIJHUMAL RELUMAL

JUDGEMENT

(1.) THE following question of law has been referred by the Tribunal:

(2.) THE relevant assessment 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 filed a revised return on August 30, 1967. THE assessee filed along with the return, profit and loss account and the balance-sheet. THE profit and loss account for the talkies showed that a sure of Rs. 10,708 had been adjusted towards development rebate reserve. THE ITO did not allow the claim for deduction of development rebate on the ground that the statutory reserve had not been created at the time of filing of the return. THE AAC and the Tribunal, however, allowed the claim of the assessee. THE Tribunal's view was that as the reserve had been created at the time of the filing of the revised return and before the assessment, the assessee is entitled to claim the development rebate.

(3.) WE must also record our appreciation for Shri B.L. Nema, advocate, who appeared as amicus curiae to assist us.