THE INDIAN OVERSEAS BANK LTD. vs THE COMMISSIONER OF INCOME-TAX, MADRAS.

The Supreme Court held that the appellant, a public limited banking company, was not entitled to the development rebate under proviso (b) of Section 10(2)(vi-b) of the Income-tax Act, 1922, as it failed to create a separate reserve as required. The Court clarified that the reserve under Section 17 of the Banking Companies Act, 1949, is distinct and cannot be used for business purposes, thus not satisfying the conditions for the rebate. The appeal was dismissed, affirming the High Court's ruling against the appellant.