Summarize the following court judgment. ivil Appeal No. 330 of 1976. From the Judgment and Order dated 13.3.1972 of the Allahabad High Court in ITR No. 457 of 1968. V. Gauri Shankar	 section Rajappa and Ms. A. Subhashini for the petitioner. Harish N. Salve	 A.T. Patra	 Ms. Bina Gupta	 Ms. Monika Mohil	 Rajiv Shakhdhar and Praveen Kumar for the Respondent. The following Order of the Court was delivered: This appeal is directed against the Judgment dated 13.3.1972 made by a Division Bench of the Allahabad High Court in Income Tax Reference No. 457 of 1968 deciding the following question of law in favour of the assessee and against the Revenue. "Whether on the facts and in the circumstances of the case the assessee can be said to have complied with the provi sions of proviso (b) to section 10(2)(vib) of the Income Tax Act	 1922 and was	 therefore	 entitled to allowance of development rebate on the plant and machinery installed after 1.1. 1958. " It would be unnecessary to detail out facts which led to the framing of the question and the answer given. The dis pute centered around the timing of the creation of the reserve known as the development rebate reserve. In Commis sioner of Income Tax	 Madras vs Veeraswami Nainar & Ors.	 55 ITR p. 35	 the Madras High Court took the view that develop ment rebate reserve should be made at the time of making up the Profits and Loss Account. This view was affirmed by this Court in Indian Overseas Bank 's Ltd. vs Commissioner of Income Tax	 12. Both cases arose under the Indian Income Tax Act	 1922. Distinction was drawn between develop ment rebate reserve and other reserves creatable under the Companies Act and the Income Tax Act and it was required to be separately created. On appearance of the Indian Overseas Bank 's case on the scene it appears that an 464 important circular of the Central Board of Direct Taxes was unwittingly mowed down. That circular was of October 4	 1965 and stands reproduced in circular No. 189 dated 30th Janu ary	 1976 at page 90 in 102 Income Tax Reports (Statutes). The Board 's Explanation with regard to the position for creation of statutory reserve for allowance of development rebate was in these terms: (a) In the case of certain industrial undertakings	 particularly those in which there is Government participa tion either by way of capital	 loan or guarantee	 and where there are certain obligations by law or agreement about the maintenance of reserve for development purposes	 the devel opment rebate reserve may be treated as included in the said reserve though not specifically created as a development rebate reserve. (b) In a case where the total income computed before allowing the development rebate is a loss there was no legal obligation to create any statutory reserve in that year as no development rebate would actually be allowed in that year. (c) Where there was no deliberate contravention of the provisions	 the Income tax Officer may condone genuine deficiencies subject to the same being made good by the assessee though operation of adequate additional reserve in the current year books in which the assessment is framed. This led to a spate of litigation	 pressing the Indian Overseas Bank 's case some taxing authorities in some cases took revisional and rectificatory actions. These reached various High Courts. The Gujarat High Court in Surat Textile Mills Ltd. vs Commissioner of Income tax Gujarat	 80 I.T.R.P. 1 opted for what may be called a narrow view in assuming that besides Explanation (a) reproduced above explanations (b) and (c) as well too stood wiped out by Indian Overseas Bank 's case. In these circumstances the Central Board of Direct Taxes took the step of withdrawing in the year 1972 the Circular dated October 14	 1965 to the extent it stood superseded by decision in Indian Overseas Bank 's case and the judgment of the Gujarat High Court in Surat Textile Mills Ltd. vs Commissioner of Income Tax. Other High Courts took what may be called a broader view. The trend of reasoning in those cases was that expla nation (a) only was done away with by this Court in Indian Overseas Bank 's case but explanations (b) and (c) were still alive. In this connection Veerabha 465 dra Iron Foundary & Anr. vs Commissioner of Income Tax	 ; Tata Iron and Steel Co. Ltd. vs N.C. Upadhyaya	 96 I.T.R.p. 1 and The Commissioner of Income Tax vs Sardar Singh	 may be seen. In the face of such difference of opinion	 it was repre sented to the Board that earlier instructions dated October 14	 1965 represented the correct position of law and that the withdrawal to the extent it was presumed to be overruled by this Court in Indian Overseas Bank 's case had created unnecessary hardship to the assessees. It appears that the instant case	 out of which this appeal has arisen	 was decided by the Allahabad High Court taking the broader view	 Special leave was sought by the Revenue from this Court on the question of resolving the conflict between the two views. Leave was granted at a time when the Board itself had clarified the matter vide Circular No. 189 dated 30th January	 1986 of which hint has been left earlier. The Board states to have re examined the issue involved coming to the view that except the clarification given in paragraph (a) above	 which stood superseded by the decision of this Court in Indian Overseas Bank 's case	 the clarifications given in paragraphs (b) and (c) quoted above hold good. It can thus legitimately be stated that the Board has itself opted for the view expressed in Tara Iron and Steel Companies ' case and other cases of the kind taking the broader view in the matter. When the Board has itself opted for that view and that view is being followed by Income Tax authorities concerned	 we see no reason to do the exercise of taking any side of the two views and leave the matter at that. It is undisputed that the Board 's view is not only valid under the new Income Tax Act of 1961 but to the Indian Income Tax Act	 1922 as well. For the foregoing discussions this appeal fails and the judgment of the High Court is left untouched. In the circum stances of the case there will be no order as to costs. V.P.R. Appeal dis missed.

In Commissioner of Income Tax	 Madras vs Veeraswami Nainar & 9rs. 	 	 the Madras High Court took the view that the development rebate reserved should be made at the time of making up the Profits and Loss Account	 and this was affirmed by this Court in Indian Overseas Bank 's Ltd. vs Commissioner of Income Tax	 A distinction was drawn between development rebate reserve and other reserves createable under the Companies Act and the Income Tax Act and it was required to be separately created. Consequent to this decision it was noticed that an important circuit of the Central Board of Direct Taxes dated October	 4	 1965 was unwittingly mowed down. This circular gave the Board 's Explanation three paragraphs (a)	 (b) and (c) regarding the position for creation statutory reserve for allowance of development rebate. A spate of litigation ensued and some of the taxing authorities	 relying on the Indian Overseas Bank 's case in some cases	 took revitional and rectificatory actions	 and these reached various High Courts. The Gujarat High Court in Surat Textiles Mills Ltd. vs Commissioner of Income tax Gujarat	 opted for the narrow view in assuming that all the 3 Explanations contained in the 1965 Circular stood wiped out by Indian Overseas Bank 's case. The Central Board of Direct Taxes	 therefore	 took the step of withdrawing in the year 1972 the Circular dated October 14	 1965 to the extent it stood superseded by deci sion in Indian Overseas Bank 's case. Other High Courts	 however	 took a broader view to the effect that Explanation contained in para (a) only was done away with by this Court 's decision in Indian Overseas Bank 's case and that contained in paras (b) and (c) were still alive. 462 On account of the aforesaid difference of opinion	 it was represented to the Board that the earlier instructions dated October 14	 1965 represented the correct position of law and that the withdrawal to the extent it was presumed to be overruled by the decision in Indian Overseas Bank 's case had created unnecessary hardships to the assessees. In the instant appeal the question	 whether the respond entassessee was entitled to allowance rebate on the plant and machinery after 1.1.1958	 after due compliance with the provisions of proviso (b) to section 10(2)(vib) of the Income Tax Act	 1922 was answered by the Division Bench of the Allahabad High Court in favour of the assessee and against the Revenue. The Revenue appealed to this Court. Dismissing the appeal	 this Court	 HELD: 1. The Board itself had clarified the matter by Circular No. 189 dated 30th January	 1986. It states to have re examined the issue involved coming to the view that except the clarification contained in Explanation para (a) which stood superseded by the decision of this Court in Indian Overseas Bank 's case	 the clarification given in paragraphs (b) and (c) hold good. [465D] 2. The Board itself has opted for the broader view expressed in the matter in the	Tata Iron and Steel Compa nies ' case and other cases. There is	 therefore	 no reason to do the exercise of taking any side of the two views. [465E] 3. It is undisputed that the Board 's view is not only valid under the new Income Tax Act of 1961	 but to the Indian income Tax Act	 1922 as well. [465F] Commissioner of Income Tax	 Madras vs Veeraswami Nainar and Ors.	 	 affirmed. Indian Overseas Bank Ltd. vs Commissioner of Income Tax	 	 followed. Surat Textile Mills Ltd. vs Commissioner of Income Tax Gujarat	 	 overruled. Veerabhadra Iron Foundary & Anr. vs Commissioner of Income I.T.R. 425; Tata Iron and Steel Co. Ltd. vs N. C Upadhyaya	 and The Commissioner of Income Tax vs Sardar Singh	 86ITR 387	 approved.