BARAR LION BUTTONS P LTD Vs. COMMISSIONER OF INCOME-TAX

JUDGEMENT

(1.) THE Income-tax Appellate Tribunal, Delhi Bench " C ", has referred the following question of law for our opinion:

(2.) THE assessee is a private limited company engaged in the business of manufacturing glass buttons. The assessee installed new moulds for the manufacture of buttons in the assessment years 1962-63 and 1963-64. The total amount spent for this purpose in the first year was Rs. 30,641 and in the second year Rs. 12,238. Consequently, the assessee claimed development rebate on the costs of moulds at Rs. 7,660 and Rs. 3,060 respectively. However, the assessee did not comply with the provisions of Section 34 (3) of the Income-tax Act, 1961, inasmuch as no credit was made to a reserve account to be utilised by the assessee during the period of ten years next from the date on which the reserve was created. What the assessee did was, it debited the costs of the moulds to the profit and loss account and nothing more. On the basis of this debit entry, it claimed that it was entitled to the development rebate under Section 33 of the Act. This contention has failed right up to the Tribunal. While dealing with this matter, the Tribunal observed as follows :

(3.) THE assessee then applied to the Tribunal for statement of certain questions of law, but only the question, to which we have made a reference, has been referred for our opinion.