TMI Blog1967 (7) TMI 53X X X X Extracts X X X X X X X X Extracts X X X X ..... as " the Act "). The reference has been made at the instance of the assessee, Bharat Stores Ltd., Agra (hereinafter referred to as " the assessee "). This case relates to the assessment made in the year 1947-48, the relevant previous year being the one ending on June 30, 1946. The statement of the case shows that the assessee, which is a registered company incorporated under the Indian Companies Act, carries on the business of purchase and sale of buildings and machinery and keeps its accounts in the mercantile system. The assessee had purchased a vast area of land for a sum of Rs. 1,30,000. It sub-divided the land into a large number of small plots for the purpose of construction of residential houses. The assessee published advertis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty which has not been fulfilled in the year of account or even in the subsequent year. The income-tax authorities were justified in rejecting the claim of the assessment in this year." The assessee then moved the Tribunal for making a reference to this court. That application was rejected and the assessee made an application under section 66(2) of the Act to this court. This reference was made by the Tribunal under the orders of this court made under the aforesaid provision. The questions referred are: "1. Whether, in respect of the sum of Rs. 50,000, the assessee had incurred any enforceable liability ? 2. If the answer to question No. 1 is in the affirmative, whether the sum of Rs. 50,000 was an allowable expenditure of the year in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecurity by means of a separate document. The Supreme Court noticed this important fact at page 5 of the report by observing as follows : " This undertaking having been incorporated in the deeds of sale themselves there was certainly a liability undertaken by the appellant to carry out these developments within six months from the dates of those deeds. Time was of course not of the essence of the contract and the appellant, therefore, was at liberty to carry out that undertaking within a reasonable time. That, however, did not absolve it in any manner whatever from carrying out the undertaking and the purchaser were in a position to enforce the undertaking by taking appropriate proceedings in that behalf. " In the absence of there being ..... X X X X Extracts X X X X X X X X Extracts X X X X
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