Judgment

ALAGIRISWAMI, J.:- This is an appeal against the judgment of a Division Bench of the Allahabad High Court affirming on appeal the judgment of a learned Single Judge dealing with company matters. The appellant is the U. P. State Electricity Board and the respondent is the Official Liquidator of the Lower Ganges Jamuna Electricity Distributing Co. Ltd. This company went into liquidation in 1937 and had been administered by the Official Liquidator till it was purchased by the appellant Board on 1-6-1961 for a sum of Rs. 7,82,256/-as mutually agreed. Thereafter disputes arose about certain reserves of the company and in the present appeal we are concerned only with what is called the Development Reserve. It was by the Finance Act of 1955 that a provision was made in the Income Tax Act for development rebate. In 1957 the Sixth Schedule of the Electricity (Supply) Act, 1948 was amended introducing a new clause VA which reads:

"(1) There shall be created a reserve to be called the Development Reserve to which shall be appropriated in respect of each accounting year a sum equal to the amount of income-tax and supertax calculated at rates applicable during the assessment year for whi