TMI Blog1985 (9) TMI 5X X X X Extracts X X X X X X X X Extracts X X X X ..... gainst the decision of the High Court rendered on January 16, 1973, in Income-tax Reference No. 44 of 1971, whereby the High Court took the view that the Tribunal was not justified in law in directing the Income-tax Officer first to allow the development rebate under the rules and subsequently withdraw it under section 35(l1) of the Indian Income-tax Act, 1922 (hereafter referred to as " the Act "). The short facts giving rise to this appeal are that for the assessment year 1958-59 in respect whereof the accounting year ended on March 31, 1958, the assessment was first completed by the ITO on July 16, 1960, and while making such assessment, development rebate at the prescribed rate was allowed in favour of the assessee in respect of seven ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of their purchase had come to his notice and it was not necessary for him first to allow the development rebate and then withdraw or cancel the same later on. The matter was carried by the assessee to the Tribunal and the Tribunal took a contrary view holding that it was incumbent upon the Income-tax Officer first to allow the full development rebate under the Rules and then subsequently withdraw it under section 35(l 1) of the Act. A specific question as to whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in directing the Income-tax Officer first to allow full development rebate under the Rules and subsequently withdraw it under section 35(l 1) of the Act, was referred to the High Court at the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llate Assistant Commissioner to be undertaken by the Income-tax Officer and when such de novo assessment was undertaken by the Income-tax Officer, the aforesaid fact about the buses having been disposed of by the assessee within eight years from the date of their purchase had come to the knowledge of the Income-tax Officer. In such circumstances, we do not think that it was necessary for the Income-tax Officer to have first allowed the development rebate and then cancelled it under section 35(l 1) of the Act. Among the conditions which entitle an assessee to claim development rebate is also the condition that the assessee has not disposed of the machinery to any person other than the Government before the expiry of 10 years from the end of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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