TMI Blog1958 (8) TMI 58X X X X Extracts X X X X X X X X Extracts X X X X ..... erty. That expenditure also was in Japanese currency. Thus the total cost of acquisition was shown as 51,670 dollars in the books of the assessee. On September 29, 1951, a portion of these properties was sold for 24,500 dollars. That was in Malayan currency, which alone was in use after the Japanese occupation of Malaya had ended in 1945. To appreciate the contentions of the assessee, it is necessary to set out some details of what happened during the period between the purchase and sale of the properties, a matter of history. The Japanese were in occupation of Malaya between February, 1942, and September, 1945. During that period both the British currency that had been issued before the enemy occupation and the Japanese currency which the Japanese introduced were in circulation side by side. It was, however, common ground that after a time there ceased to be any parity between the dollar of the Malayan currency and the dollar of the Japanese currency. Parity was maintained up to the end of December, 1942. Thereafter, the Japanese currency steadily depreciated in relation to the Malayan currency, the depreciation being more marked from about January, 1944. By the middle of Au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sses during the occupation period. The salient features of that scheme, relevant for our purposes, were as follows. The assessment year 1941-42 related to an accounting period well before the Japanese occupied Malaya. The accounting years corresponding to the assessment years 1942-43 to 1946-47 were taken as one unit. During most of that period, it should be remembered, Malaya was under enemy occupation. The scheme provided for the determination of the profits and losses during this period of five years. The scheme contemplated and provided for the ascertainment of the real losses during this period. A further provision in the scheme was that these losses should be carried backward to be set off first against profits during 1942-43 assessment year and then against the profits of 1941-42. A specific provision was made that, if an assessee elected to be governed by this scheme to obtain relief, principally with reference to 1942-43 and 1941-42 assessments, he would not be allowed to carry forward his losses whether computed under the scheme or otherwise. Thus it constituted a departure from the normal principle of assessment, that a loss would not be given retrospective effect but th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... every accounting period at its original cost price. At the stage of the appeal to the Tribunal, the contention of the Department was that the cost price of the two properties in question should be computed and that 51,670 dollars in Japanese currency which the assessee had expended for the purchase should be converted to Malayan currency in accordance with the schedule to the Malayan Ordinance. On that basis the cost price was computed at 20,036 dollars. Again on that basis, the profits of the sale were computed at 4464, that is, 24,500 minus 20,036. The contention of the assessee before the Tribunal was that at least 33,700 dollars should be taken as the cost price, because that was the valuation which was accepted by the Department for granting relief to the assessee under the scheme. The Tribunal rejected that contention and confirmed the computation of profits at 4,464 dollars. The question which the Tribunal referred to this court for its determination under section 66(1) of the Income-tax Act ran: Whether the revaluation of the price of the Jalan Baru properties purchased during the occupation period at 20,036 dollars and on that basis, treating the sum of 4,464 do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iven in the Schedule to the Malayan Ordinance was wrong, because that Ordinance was not intended to provide the rates of conversion for any purpose beyond what the Ordinance was expressly specified to achieve, the determination of the rights and liabilities of debtors and creditors. The Report of the Select Committee which preceded the issue of the Malayan Ordinance has also been made part of the record. That showed that the Committee made a real attempt to ascertain the value of the Japanese currency in relation to the Malayan currency at every stage of the occupation period. Besides, we have to point out that no other basis of conversion was proposed by the assessee at any stage. We are unable to hold that the Department and the Tribunal were in error in adopting the conversion table furnished in the Schedule to the Malayan Ordinance. Thus the position we have reached is, that, had not the scheme intervened, the Department would have been entitled to ascertain the cost price of the properties in terms of Malayan currency and to compute the cost price of 20,036 dollars in Malayan currency. Do the intervention of the scheme and the valuation of the properties at 33,700 dollars f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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