Pathak, C. J. - (1.) This appeal by certificate granted by the High Court of Gujarat is directed against the judgment of the High Court on the following questions referred to it by the Appellate Tribunal:"(1) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the assessee cannot be denied the benefit of carry forward' of development rebate 2) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in directing that the Income-tax Officer should determine the development rebate and such development rebate should be allowed to be carried forward and set off when profits are available and if, in. that year, the assessee fulfils the necessary requirements for such allowance like creation of adequate reserve -
(2.) The assessee is a limited Company. It has a textile mill at Cambay in the State of Gujarat. For the assessment year 1962-63, the previous year being the calendar year 1961, the assessee claimed that a sum of Rs. 1,26,233 should be allowed as development rebate under S. 33 of the Income Tax Act, 1961. The Income-tax Officer rejected the claim on the ground that the assessee had not created a reserve as contemplated by sub-s. (3) of S. 34 of the Income Tax Act, 1961. The Appellate Assistant Commissioner of Income-tax dismissed the appeal filed by the assessee. In second appeal the claim by the assessee found favour with the Income-tax Appellate Tribunal. At the instance of the Revenue the questions set forth earlier were referred to the High Court for its opinion. The High Court has answered the questions in favour of the Revenue and against the assessee. It has held that the assessee had failed to comply with the conditions of sub-s. (3) of S. 34 of the Act.
(3.) In this appeal by the assessee it is urged that the view taken by the High Court is erroneous and that it is not necessary that a reserve should.. be created in the. previous year during which the machinery or plant was installed.;