TMI Blog1985 (1) TMI 93X X X X Extracts X X X X X X X X Extracts X X X X ..... eed with the ITO on this issue and dismissed the assessee's appeal. The assessee has, therefore, come up in the present appeal before us. 3. The assessee's learned counsel, Shri Masand, submitted to us that this was the first year of assessment, the accounts were audited on 6-7-1977, when the return was filed on 8-8-1977 and, therefore, the non-submission of the auditors' report in the prescribed form under rules 18B and 18C was a mere technical default, which should not deprive the assessee of the substantive claim of deduction under sections 80HH and 80J. Our attention was invited to two orders of the Tribunal in the cases of Rathi Gum Industries v. ITO [1982] 14 TTJ 655 and Gujarat Oil Allied Industries v. ITO [1982] 14 TTJ 552 where ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to by the assessee's learned counsel, the auditors' report in the prescribed form had been submitted before the completion of the assessment unlike in the present case where it was not submitted at all before the completion of the assessment and also before the AAC. He, therefore, submitted that the assessee's claim of deduction under sections 80HH and 80J in the absence of the auditors' report as prescribed by rules 18B and 18C was rightly not entertained by the revenue authorities. 5. The assessee's learned counsel, Shri Masand, in reply submitted that if the auditors' report in the prescribed form, by oversight, was not filed before the ITO in the course of the assessment proceedings, the ITO could have asked for the report in the cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent case. In the case of Indian Overseas Bank Ltd. v. CIT [1970] 77 ITR 512 (SC), the assessee, which was a banking company, transferred an amount from the profit and loss account to the reserve fund, which was sufficient to meet the requirements of both section 17 of the Banking Companies Act, 1949 as well as the proviso (b) to section 10(2)(vib) of the Indian Income-tax Act, 1922 and on this basis it was claimed that since the transfer to the reserve was sufficient to meet both the requirements, the technical lapse of not creating a reserve by transfer from the profit and loss account to the development rebate reserve should not stand in the way of the assessee-banking company not being entitled to development rebate. The Hon'ble Supreme ..... X X X X Extracts X X X X X X X X Extracts X X X X
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