TaxTMI 
TaxTMI 
2007 (10) TMI 256
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....n behalf of the assessee is that under section 153(1)(a)(iii) of the Income-tax Act no order of assessment shall be made under section 143 or section 144 at any time after two years from the end of the assessment year in which the income was first assessable, when such assessment order is an assessment year commencing on or after April 1, 1969. This is subject to what is set out in sections 144A and 144B of the Act. 5. Under section 144B where, in an assessment to be made under sub-section (3) of section 143, the Income-tax Officer proposes to make any variation in the income or loss returned which is fixed by the Board under sub-section (6), the Income-tax Officer shall in the first instance, forward a draft of the proposed order of assessment to the assessee. A procedure is then prescribed as to how the matter has to be then proceeded with. On the draft order being served the assessee must forward his objections if any within the time stipulated in sub-section (3), to the Inspecting Assistant Commissioner. The Inspecting Assistant Commissioner shall after going through (wherever necessary) the record relating to the draft order, issue, in respect of the matters covered by the ob....
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....n admitted position that the normal period of limitation under section 153(1)(a)(iii) was March 31, 1982. The Assessing Officer forwarded the draft order on March 24, 1982 and the Assessing Officer received the direction from the I. A. C. on September 25, 1982. That would be 185 days. Considering the language of Explanation 1(iv) which uses the expression "commencing from the date". When the Act is a Central enactment and has, used the expression "commencing from" and considering section 9 of the General Clauses Act, once the word "from" is used, the first in the series of days or any other period of time has to be excluded. From the chart produced by the assessee for the month of March, 8 days have been counted including March 24. In terms of the section 9 of the General Clauses Act if the first day is excluded then the number of days remaining in March would be 7 and not 8 as calculated on behalf of the assessee. Thus the time taken between the Assessing Officer forwarding the draft order and the Assessing Officer receiving the directions from the I. A. C. on September 25, 1982, would be 185 days and not 186 days as calculated by the assessee. If it is so considered then the la....
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....sed by this court in Suit No. 660 of 1968, a sum of Rs. 32,70,000 was paid to New Swastik Land Development Corporation. The name of New Swastik Land Development Corporation had been changed to M/s. Oshiwara Land Development Corporation P. Ltd. The Bombay Municipal Corporation had also acquired some land and in respect of which the compensation was also paid. The amounts which are the subject matter of the notice are the amounts received as compensation from proceedings in land acquisition or from transfer of land. 14. The Assessing Officer relied on the memorandum and articles of association and set out that as per clause 3 of the main objects for which the company is incorporated one of the objects is to acquire by purchase, lease, exchange deal in or otherwise, lands and properties of any tenure or any interest in lands and properties in the State of Maharashtra and elsewhere. In the light of that the Assessing Officer proposed to tax the amount as set out as business income for the assessment year 1979-80 and the assessee was called upon to file objections. The assessee took various objections. It was their contention that the assessee is an investment company and they have tak....
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....78-79 had been treated as investment company by describing as such. In respect of the assessment year 1976-77 which had come up in I. T. A. No. 1352(Bom)/1980 decided on March 14, 1981, where the question was regarding the ascertainment of the capital gains on the transfer of certain land, the Departmental authorities had not treated the transaction for that assessment year as a business venture, but it was treated as a capital transaction resulting in a capital gain. This was the material before the Tribunal. 17. The Tribunal posed to itself a question as to whether these amounts represented the assessee's income from any business ? 18. Relying on various judgments it noted that underlying the expression "business" is the fundamental idea of continuous exercise of an activity. In trade as well as in business there is a continuity of operation. The activities organised on normally accepted commercial lines constitute the essence of any business. Relying on the ratio of the judgment of the Privy Council, the Supreme Court and the various High Courts which were referred to, the Tribunal noted that in order to say that the assessee carried on a business, there has to be some continu....
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....o make profit by resale of the shares and not making investment, the order of the High Court interfering with the judgment of the Tribunal was set aside and the order of the Tribunal was restored. 20. We may advert to some other judgments which would have a bearing on the issue before us as to whether the activity carried on by the assessee was an adventure in the nature of trade. In Janki Ram Bahadur Ram v. CIT [1965] 57 ITR 21 (SC) the court was considering the case where the appellant, a dealer in iron scrap and hardware, agreed to purchase all the rights of a company in a jute pressing factory installed on a piece of land. The appellant did not carry on business in jute at any time before the purchase of the jute press and apart from effecting certain repairs and putting the factory in working condition the appellant did not attempt to work the factory. The warehouse or warehouses on the plot were demolished by the appellant. The land and the factory were for a profit. The court noted that it is for the Revenue to establish that the profit earned in the transaction is within the taxing provision. The court held that if a transaction is related to the business which is normally....