1964 (10) TMI 21 - SUPREME COURT

Whether the assessee was properly assessed on ₹ 4,25,050 as profits under the proviso to section 10(2)(vii) of the Act?

Whether there were materials for the Tribunal estimating the sale value of the buildings at ₹ 2,32,963 ?

Held that:- By the fiction, if the business must be deemed to be in existence during the previous year and that the buildings sold must be deemed to have been used for the business during that year, the amendment was not necessary. If it existed, there could not have been a cessation of it during the previous year. If the argument was correct, there would be no time-limit for the assessment of the surplus. Whenever a building was sold, whatever might be the time lag, by fiction, the business, as well as the user of the building in that business would be in the previous year by the year of assessment. We cannot accept a contention yielding such a result unless it is so clearly expressed. Indeed, the expressed intention of the legislature is the other way. We therefore hold that the amendment only removed one of the conditions for the exigibility of the said surplus to tax, namely, the cessation of the business and in other respects, the construction put upon the proviso by the earlier decisions of this court is still good law. In our view, the answers given by the High Court to the questions propounded are correct. Appeal dismissed.