COMMISSIONER OF INCOME TAX, DELHI CENTRAL vs MODI SPINNING AND WEAVING MILLS CO. LTD.

The Supreme Court upheld the decision of the Allahabad High Court regarding the entitlement of the respondent-assessee to development rebate on plant and machinery under Section 10(2)(vib), Proviso (b) of the Income Tax Act, 1922. The Court noted that the Central Board of Direct Taxes (CBDT) Circular No. 189 clarified that only Explanation (a) of the 1965 Circular was superseded by the Indian Overseas Bank case, while Explanations (b) and (c) remained valid. The Court dismissed the Revenue's appeal, affirming the broader interpretation of the CBDT's position on the matter.