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2015 (6) TMI 34 - AT - Income TaxDisallowance u/s 36[1](viii] - no reserve was created - appellant submits that the appellant may be permitted now to create such reserve - Held that:- The case of the assessee that admittedly it had not created any reserve in its books of account before claiming the said deduction under section 36(1)(viii) of the Act on the surmise that no such reserve is to be created in view of wording of the section finds no merit in the said plea of the assessee in view of the similar wordings in section 36(1)(viia) of the Act which have been interpreted in the case of State Bank of Patiala vs. CIT (2004 (5) TMI 12 - PUNJAB AND HARYANA High Court) which, in turn, has been applied in the case of Shri Mahalaxmi Co-op. Bank Ltd. vs. ITO (2014 (1) TMI 1366 - ITAT PUNE). In the absence of any reserve being created the assessee is not entitled to the said claim of deduction under section 36(1)(viii) of the Act. Plea of the assessee that it should be allowed an opportunity to create the said reserve in its books of account now - Held that:- In view of the clear wording of the section that where it is provided that the special reserve is to be created and maintained by the special entity from its profit derived from the eligible business, then such non-creation of special reserve by the assessee cannot be made good by creating any reserve on a later date. The books of account of the assessee are admittedly audited and in the absence of any reserve being created in such audited books of account, no remedy is available to the assessee to create such a reserve on a later date. The facts in the case of CIT vs. Punjab State Industrial Development Corporation (2009 (11) TMI 37 - PUNJAB AND HARYANA HIGH COURT) were different, wherein the assessee had already created a reserve before claiming the deduction under section 36(1)(viii) of the Act. However, the assessee therein was entitled to a higher deduction under section 36(1)(viii) of the Act for which opportunity was granted to create additional reserve. In the facts of the present case, there was no reserve created by the assessee and in the absence of same, we find no merit in the alternate plea raised by the assessee and the same is dismissed.- Decided against assesse.
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