Accrual of trading profits from a single venture is assessable before full completion when profits can be ascertained.

Profits from a single adventure in the nature of trade were held assessable in the relevant previous years as they accrued, even though the entire venture had not ended. The Court held that the governing income provisions do not require postponement of assessment until every plot is sold, particularly where the cost of the land has already been recovered and the profits are capable of ascertainment from the years in which the plots were sold. Authorities suggesting otherwise were distinguished as fact-specific and not laying down an absolute rule. The assessment was therefore permissible before completion of the whole transaction, and the result favoured the assessee.

---

---

Issues: Whether the profits arising from a single adventure in the nature of trade could be assessed in the year in which the entire venture had not yet ended, where the cost of the land had already been recouped and profit had accrued in earlier years.

Analysis: The governing provisions treated income, profits and gains of a previous year as assessable for the relevant assessment year. The transaction was a single venture in the nature of trade, but that by itself did not require postponement of assessment until every plot was sold. The Court distinguished authorities where profits could not be ascertained on the facts before the court and held that those decisions did not lay down an absolute rule that no assessment can be made until the whole transaction is completed. Where the entire cost has been recovered earlier and the profits are capable of ascertainment from the years in which the plots were sold, assessment is permissible even before the venture comes to an end.

Conclusion: The profits were assessable as and when they accrued in the relevant previous years, and not only in the year when the entire transaction was completed; the answer was against the Revenue and in favour of the assessee.

---