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TMI Blog1964 (10) TMI 15X X X X Extracts X X X X X X X X Extracts X X X X ..... the return filed on his behalf a to income of Rs. 2,13,079, which included a sum of $ 21,350 as profit from the business at Paritpuntar. In computing the said profit from the business at Paritpuntar the appellant claimed an aggregate loss of $ 68,405 incurred on the sale of house property and rubber gardens as detailed below. -------------------------------------------------------------------------------------------------------------------------------------------------- No. Date of Purchase Cost price Sale price -------------------------------------------------------------------------------------------------------------------------------------------------- $ $ 1. 28 Ani, Angirasa--14, Silama House 500 2. 28 Ani, Angirasa--No. 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ----------------------------------------------------------------------------------------------------------------------- $ $ $ $ $ 1. Siradan House 25,453 9,000 7,000 - 2,000 2. 38 Garden 53,686 3,830 5,880 2,050 - 3. 35 Garden 2,668 190 1,164 974 - -------------------------------------------------------------------------------------------------------------------------------------------------- In the result the Income-tax Officer computed a profit of $ 382 in respect of the sale of the above gardens as against the loss of $ 68,405 claimed by the appellant. On appeal, the Appellate Assistant Commissioner confirmed the order of the Income-tax Officer. On further appeal, the Income-tax Appellate Tribunal took the same view as the In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... panese occupation period ; the original cost of acquisition of the 3 properties was adopted for the purpose of business balance-sheets all these years ; no loss on revaluation of the said assets by scaling down their values at any time was allowed in any of the earlier years by the department ; and, therefore, there was no justification for a departure in the year of account. He also contended that if the properties were purchased for dollars and sold for dollars, the fact of inflation or deflation of currency would be irrelevant in ascertaining the profits. That may be so in the case of a country's currency, but when a property is purchased and sold in different currencies, say Japanese and Malayan currencies as in the present case, it i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of conversion of the depreciated Japanese currency into Malayan currency. In terms the Ordinance does not directly apply to the scaling down of the cost price of properties purchased in Japanese currency. But to ascertain the real profit, as we have stated earlier, it is necessary to adopt a reasonable conversion rate. The only material that was available to the Income-tax Officer was the Schedule appended to the Ordinance. Though that Schedule was appended to the Ordinance enacted for a different purpose, it was the result of a careful inquiry made by the appropriate and responsible authorities in Malaya. The Income-tax Officer was, therefore, justified in adopting that Schedule for the purpose of ascertaining the cost price of the prope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchase was paid for in Japanese currency. The sale price was realised in Malayan currency. There was no parity between the two on the date of purchase. Certainly the Japanese currency ceased to be in use on the date of sale. To arrive at a computation of profits or losses where property was purchased in one currency and sold in another, it should be obvious that there should be a common standard ; in the circumstances of this case the purchase price had to be computed in terms of Malayan currency in which the property was sold. " The principle adopted by the High Court appears to be unexceptionable. It accords with our view. Adverting to the second argument that the Schedule to the Ordinance should be confined only to the scaling down o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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