NIRMAL COMMERCIAL LIMITED Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THESE two references can be conveniently disposed of by a common judgment.

(2.) INCOME -tax Reference No. 108 of 1977 pertains to the assessment years 1967 -68, 1968 -69 and 1969 -70 of the assessee. The questions referred to this court for its opinion in this reference are as under : '1. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the rights which remained with the assessee -company after the execution of the agreement with the shareholders were of negligible or dubious value and, consequently, the assessee would be entitled to deduct the cost of construction from the trading receipts for the purpose of determining the profit, if any, resulting from the transaction ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in not exhausted by the agreement with the shareholders ?

(3.) WHETHER the Tribunal was justified in holding that the profit with reference to the trading receipts accrued or arose only in the assessment year 1969 -70 when the floor area was actually allotted and consequently deleting the additions of Rs. 40,07,676 and Rs. 31,61,218 for the assessment years 1967 -68 and 1968 -69 ?