9911796707
TMI Blog1967 (7) TMI 53X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 advertisements in local newspapers for the sale of the plots. In the advertisements it was mentioned that the assessee had undertaken to lay out metalled roads in the area. The statement of the case is clear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en 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 question? " The statement of the case does not show that in the sale deeds which the assessee had executed in favour of the various purchasers who purchased plots from the assessee any under taking had b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mselves 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 anything in the statement of the case to show that in the various sale deeds executed by the assessee in favour of the purchaser an undertaking had been incorporated, the liability to construct roads was not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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