Judgement

N. H. BHAGWATI J. : This appeal with a certificate under Art. 135 of the Constitution read with S. 66A (2) of the Indian Income-tax Act raises the question as to whether the appellant was entitled to a deduction of Rs. 24,809 in the computation of its profits and gains for the assessment year 1948-49.

2. The appellant deals in land and property and carries on land developing business and in the course of the said business, it buys land, develops it so as to make it fit for building purposes and sells it at a profit in plots. The developments undertaken are in the main, that roads are to be laid out, a drainage system to be provided and street lights installed, and they are to be maintained till the same are taken over by the Municipality. The whole of the development is not carried out before the land is sold, nor the whole of the sale price received in cash at the time of the sales. The procedure followed is that when a plot is sold, the purchaser pays about 25 per cent, of the purchase price in cash and undertakes to pay the balance with interest at a certain rate in ten annual instalments which he secures by creating a charge on the land purchased. The appellant, in its