Edgar Joseph Jr. SCJ:

Preliminary

This is an appeal from the judgment of the High Court, at Ipoh, dismissing an appeal by the Lower Perak Cooperative Housing Society Bhd. ("the taxpayer") by way of case stated by the Special Commissioners of Income Tax ("the Special Commissioners") who had dismissed its appeal against notices of assessment dated 16 August 1975 and 11 September 1982, in respect of the years of assessment 1972 and 1974, respectively.

More particularly, the taxpayer challenged the inclusion in its income tax assessments of sums of RM4,596.40 and RM118,994.50 representing profits received by the taxpayer for the disposal in 1971, of 41 subdivided building lots, and in 1973, of 407 building lots, which profits the revenue claimed to be of a revenue nature, being gains or profits from trading and therefore assessable to tax under the Income Tax Act 1967, ("the Act") and the Supplementary Income Tax Act 1967. For purposes of the assessment to income tax, the revenue considered that the proper value to be placed on the subdivided lots as stock-intrade should be based on the cost to the taxpayer for the land in 1956, that being the year when it acquired the land.