| Case ID |
23366a57-b8a9-4f3a-8ec2-d50c85583874 |
| Body |
View case body. Login to View |
| Case Number |
TAX CASE No. 111 OF 1965 (REFERENCE No. 47 OF 1965 |
| Decision Date |
Jan 30, 1969 |
| Hearing Date |
|
| Decision |
The case revolves around the issue of whether the carry forward of development rebate is permitted under the Income-tax Act, 1961, specifically concerning the conditions under which such a rebate can be claimed. The court held that carry forward of development rebate is only allowed if the failure to create a requisite reserve is due to the absence of income in the relevant year. If income is available but distributed as dividends, the assessee is disentitled to the carry forward of the rebate to the extent of such failure. The judgment emphasized the necessity for an actual reserve to be created, not merely book entries, and clarified that the provisions of the Act must be strictly adhered to in order to claim the rebate. The decision partly favored the assessee, allowing a portion of the development rebate carried forward, while also confirming the disallowance for certain amounts due to non-compliance with reserve creation requirements. |
| Summary |
This case addresses the intricate provisions of the Income-tax Act, 1961, particularly Section 33 regarding development rebates. The Madras High Court deliberated on the conditions necessary for the carry forward of such rebates, emphasizing that an actual reserve must be created rather than relying on mere bookkeeping entries. The court's decision clarified that if an assessee has income available but fails to create a reserve due to distribution as dividends, they would be disqualified from carrying forward the development rebate. The ruling underscores the importance of adhering to statutory requirements, ensuring that the financial practices align with legal expectations. This case is significant for entities seeking tax rebates under Indian tax law, as it sets a precedent for how reserves must be managed and reported in financial statements. The terms 'development rebate', 'income tax', 'reserve creation', and 'tax law compliance' emerge as critical keywords within this context, making this case relevant for ongoing discussions in tax law. |
| Court |
Madras High Court
|
| Entities Involved |
Commissioner of Income Tax,
Radhika Mills Ltd.
|
| Judges |
Veeraswami, J.,
Ramaprasada Rao, J.
|
| Lawyers |
S. Swaminathan,
K. Ramagopal,
V. Balasubrahmanyan,
J. Jayaraman
|
| Petitioners |
Radhika Mills Ltd.
|
| Respondents |
Commissioner of Income Tax
|
| Citations |
1969 SLD 542,
(1969) 74 ITR 661
|
| Other Citations |
Not available
|
| Laws Involved |
Income-tax Act, 1961
|
| Sections |
33,
10(2)(vib)
|