Currency conversion for cross-currency property sales may rely on a reliable statutory schedule to compute real taxable profit.

Where property is purchased in one currency and sold in another, the taxing authority may use a reliable conversion standard to determine the real profit or loss. The Schedule to the Debtor and Creditor (Occupation Period) Ordinance, 1948, though enacted for scaling down debtor-creditor liabilities, was treated as the only dependable material for fixing a reasonable conversion rate in the relevant assessment year. Earlier use of a different valuation method did not bind the department from applying the correct basis later. The claimed loss was therefore disallowed in law on the department's conversion method.

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Issues: Whether, for computing the assessee's profit on sale of properties purchased during enemy occupation in Japanese currency and sold later in Malayan currency, the purchase cost could be converted by adopting the Schedule to the Debtor and Creditor (Occupation Period) Ordinance, 1948, and whether the department was bound by any earlier method of valuation.

Analysis: The properties were acquired in one currency and sold in another, so a common standard of conversion was necessary to ascertain the real profit or loss. The Schedule appended to the Malayan Ordinance, though enacted for scaling down debtor-creditor liabilities, was the only reliable material available to determine a reasonable conversion rate and had been prepared by responsible authorities after careful inquiry. The prior adoption of some other method in earlier years did not prevent the assessing authority from applying the correct basis for the relevant assessment year.

Conclusion: The adoption of the conversion table in the Schedule to the Ordinance for valuing the cost of the properties was valid, and the disallowance of the claimed loss was in law.

Final Conclusion: The assessment of profit on the basis of currency conversion adopted by the department was upheld, and the assessee's challenge failed.

Ratio Decidendi: Where an asset is purchased in one currency and sold in another, the taxing authority may adopt a reliable conversion standard to compute the real profit, even if that standard originates in a statute enacted for a different purpose.

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