COMMISSIONER OF INCOME TAX-Applicant vs MESSRS BEACH LUXURY HOTEL — 1969 PLD 318

Citation: 1969 PLD 318

Court: Sindh High Court

Year: 1971

Decision Date: 1971-12-05

Parties: COMMISSIONER OF INCOME TAX-Applicant vs MESSRS BEACH LUXURY HOTEL

Headnotes

Case cited as PLD 1969 SC 318

Judgment Text

Court Name: Sindh High Court Judge(s): Qadeer-ud-Din Ahmad, Durab Patel Title: COMMISSIONER OF INCOME TAX-Applicant vs MESSRS BEACH LUXURY HOTEL Case No.: Civil Reference No. 8 and I. T. C. No. 37 of 1966 Date of Judgment:1971-12-05 Reported As: 1971 PTD 348 Result: Order accordingly JUDGMENT JUDGMENT QADEERUDDIN AHMED, C. J.-The Income-tax Appellate Tribunal, Karachi Bench, has referred to this Court the following question under subsection (1) of section 66 of the Income-tax Act, 1922: "Whether on the facts and in the circumstances of the case the Tribunal was justified in law in holding that the cost of the building to the assessee was Rs. 25 lakhs." 2. The facts which form the background, briefly stated, are that on the 21st of August 1961 the assessee purchased at a public auction the evacuee property which was at that time known as Nedous Hotel, Lahore. The assessee had given the highest bid of Rs. One crore 21 lakhs, which was accepted. The amount was payable in 36 instalments over a period of 3 years either in cash or by surrendering Compensation Books of that face value. The assessee had already deposited Rs. 50,000.00 in cash as "earnest money" before the auction. At the conclusion of the auction, another payment of Rs. 5,00,000 in cash was made by it. After the auction but on the same date the assessee entered the transaction in its books of account showing its liability to be of Rs. One crore 21 lakhs without clarifying that the consideration was payable in the…

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