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TMI Blog1981 (1) TMI 47X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee-company, M/s. Joint Financers (P.) Ltd., is a company now in liquidation. We are concerned with the assessment year 1961-62, for which the accounting year ended on October 31, 1960. On May 21, 1960, a sale deed was executed by one Rajinder Kumar in respect of certain lands in village, Ballabgarh, and got registered in the office of the Sub-Registrar on May 24, 1960. The sale deed was in favour of the assessee-company and the sale price was stated to be Rs. 1,28,084. Earlier, on April 28, 1960, the board of directors of the assessee-company had passed a resolution in respect of this land which read as follows: " Further, resolved that a sum of Rs. 1,35,000 approximately be invested jointly with Shri B. K. Bedi in purchase of land si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on January 28, 1961, requesting it to execute the necessary agreement of sale in favour of the said two companies on his behalf. Though the officer mentions that the land was sold to the two companies, Mrs. Jain, appearing for the official liquidator, states that no sale deed was at all executed in pursuance of the above agreements and that the lands were acquired by the Government at some point of time but it is not known whether any compensation was paid and if so to whom. The short question for consideration is whether the difference between the sums of Rs. 1,03,625 and Rs. 66,588 could be treated as profit from an adventure in the nature of trade in the hands of the assessee. Apparently, the position has been looked at by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt to note is that the assessee is a private limited company and though it was actually carrying on a business in the financing of motor vehicles on hire purchase basis, its memorandum of association was wide enough to include, among others, " the power to sell, dispose of, turn to account, and otherwise deal with property of all kinds and in particular, land, farms, buildings, etc." Secondly, at the time of the purchase of the lands, the company had passed a resolution which shows that it was a joint purchase along with Shri Bedi. The terms of the resolution clearly show that the parties contemplated the realisation of a profit therefrom. Thirdly, the area of location of the land is quite significant. The AAC has pointed out that the lands ..... X X X X Extracts X X X X X X X X Extracts X X X X
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