JUDGMENT

PATHAK, CJI. :— 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 reserv