TMI Blog1982 (3) TMI 58X X X X Extracts X X X X X X X X Extracts X X X X ..... F. It was following two different accounting years, i.e., the calendar year for business and the financial year for property. The proceedings relate to the assessment year 1969-70. The dispute relates only to the capital gains in respect of sale of land at Amritsar. The assessee purchased land measuring 28,278 square yards during the period 1942-1947 for a sum of Rs. 1,66,273. A sum of Rs. 81,000 was spent on improvement raising the total cost of land to Rs. 2,47,723. The assessee showed a capital gain of Rs. 30 only in the return of income for the assessment year in question. The ITO while determining the capital gains, took into account only the sale of plots measuring 5,673 square yards for Rs. 1,05,700 during the previous year relevan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the decision in K. H. Mody's case [1940] 8 ITR 179 (Bom). In that case also land purchased was developed and divided into building sites. Some plots were sold during the assessment year and some later on. The I.T. authorities determined the profit earned on the sale of plots during the assessment year in question. Beaumont C.J. observed (p. 185): " It is to be noted that the whole transaction is nor yet complete, which distinguishes this case from the various other cases which have been cited in which there has been a purchase of property or goods and a subsequent sale and the courts held that the transaction amounted to carrying on business. But we are not referred to any case in which only a part of the property had been sold whilst the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refore, the assessee was entitled to claim the loss suffered in the accounting year when the last sale took place. It was observed that when only a part of the property has been sold, and the rest remains in the hands of the assessee, and might result in a profit or might result in a loss, and the whole transaction is not yet complete, no assessment can be made. On behalf of the department reliance was sought to be placed on the decision of this court in Lalit Ram Mangilal of Cawnpore v. CIT [1950] 18 ITR 286. In that case, the assessee carrying on business in cloth purchased 8 bars of gold between 29th October, 1942, and 6th November, 1942. He sold three of the bars on 27th April, 1943, at a higher rate and utilised two of them in making ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd circumstances that the decisions, In re K. H. Mody [1940] 8 ITR 179 (Bom) and CIT v. A. K. A. R. Family [1941] 9 ITR 347 (Rang) [FB], were distinguished. Reliance for the department was also placed on the decision of the Supreme Court in P. M. Mohamed Meerakhan v. CIT [1969] 73 ITR 735 . The decision in that case is also clearly distinguishable. In that case 22 plots out of the entire tract of land consisting of 23 plots were sold out and one was retained by the assessee. In these circumstances, it was possible for the ITO to work out the profits because all the plots except one had really been sold during the previous year relevant to the assessment year in which the capital gain was worked out. The decision of the Andhra Pradesh Hi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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