Judgment

HEGDE, J.: At the instance of the assessee, the Income Tax Appellante Tribunal (Madras Bench) referred to the High Court of Madras a statement of case under S. 66 (1) of the Indian Income Tax Act, 1922 (to be hereinafter referred to as the Act). The High Court answered one of the questions submitted along with the statement of case in favour of the assessee and the other in favour of the Revenue. The Revenue has not appealed against the decision of the High Court to the extent it went against it but the assessee has brought this appeal by certificate challenging the correctness of the view of the law taken by the High Curt on question No. 1 submitted for its opinion.

2. The question of law that we have to consider in this appeal is :

"Whether the creation of a reserve in compliance with S. 17 of the Banking Companies Act is sufficient compliance with the requirements of S. 10 (2) (vi) (b) proviso (b) of the Indian Income-tax Act, 1922".

3. The authorities under the Act as well as the High Court have answered this question in the negative.

4. The appellant is a public Limited Company carrying on banking business. For the calendar year 1958 the previous year relating to the asses