9911796707
TMI Blog2001 (8) TMI 47X X X X Extracts X X X X X X X X Extracts X X X X ..... able device or that the assessee had resorted to any dubious method or subterfuge are based on any material and whether such conclusion is otherwise unreasonable and perverse?" The petitioner is a public limited company within the meaning of the Companies Act, 1956. The relevant assessment year is 1991-92 for which the year ending is March 31, 1991. The system of accounting is mercantile. The assessee is an investment company and used to carry on the business, inter alia, of financing and dealing in shares sector. During the financial year 1985-86, this company took up a building construction project as a business venture. The company purchased a plot of land together with the building thereon at premises No. 42A and B, Ballygunge Circula ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the valuation report. In appeal before the Commissioner of Income-tax (Appeals), the Commissioner of Income-tax (Appeals) has allowed the loss claimed by the assessee. In the appeal before the Tribunal, the Tribunal has reversed the view taken by the Commissioner of Income-tax (Appeals). From the perusal of record it appears that the assessee has incurred the expenditure on the construction as under: ------------------------------------------------------------------------- Rs. ------------------------------------------------------------------------- 1. Cost of land 12,00,000.00 2. Registration charges ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a business activity. Accordingly, the flats, which have been constructed, have to be considered as 'stock-in-trade' of the company and the same for income-tax purposes in the same manner. The Assessing Officer has nowhere stated in the case of rejecting the accounts of the appellant, that the appellant has neither inflated the expenses relating to the execution of the project on the one hand, and on the other, the appellant has understated or suppressed the sale value of the flats inasmuch as this is the basic requirement of applying section 145 when it has been established that the accounts have been prepared in such a manner that they cannot be relied upon. There is no material or evidence shown in the assessment order or brought on rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies (P.) Ltd. v. CIT [1972] 85 ITR 500 wherein when this court has considered the issue whether capital gain can be estimated and judicial notice of rising prices can be taken. This court has taken judicial notice of the rise in the prices and held that the Tribunal was fully justified in coming to the conclusion of the fact that as there was a rise in the price of landed properties that was a cogent piece of evidence which the Tribunal was entitled to consider in arriving at its own estimate of capital gains of the Russa Road Property. The capital gains firstly is not issue before us, secondly this issue has been concluded by the Supreme Court in the case of K.P. Varghese v. ITO [1981] 131 ITR 597, wherein their Lordships have taken the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at flat has been shown in the next year, that is, 1992-93. Considering the facts that no defect has been pointed out in the books of account, the accounts are fully supported by the bills and vouchers. There is no material on record that on sale of 15 flats the assessee has received more consideration than the consideration disclosed as per the agreements as entered into by the assessee and the buyers. Out of 17 flats one has been given to the tenant who occupied the plot of land at the time of purchase of land free of cost as per the agreement and one flat has been sold in the subsequent year and the profit earned on the sale of that flat has been shown for tax purpose in the subsequent year, that is, in the assessment year 1992-93. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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