Cit Vs. Development Trust (P) Ltd.

.....the provisions of land acquisition act, 1894. it would, however, be open to the court in exercise of that power to invite the attention of the executive to any public purpose and the need for land for meeting that public purpose and to require the executive to take a decision, even a reasoned decision, with regard to the same in accordance with the statutory provisions, perhaps even within a reasonable time frame. however, the power of the court under article 226 must necessarily stop at that. thereafter, if the decision taken by the executive is capable of challenge and, there exist appropriate legal grounds for such challenge, it may also be open to the court to quash the decision and to require reconsideration. but no direction in the nature of mandamus whether interim or final can be issued by the court under article 226 to the executive to necessarily acquire a particular area of a particular piece of land for a particular public purpose. section 4; compulsory acquisition of land powers of state government held, renewal of lease in favour of petitioners would not take away power of state government of compulsory acquisition of land. renewal of lease would at best be taken into consideration for determining quantum of compensation. orderthe following question has been referred for opinion :1. whether, on the facts and in the circumstances of the case the tribunal was correct in law in following the view that the liability in this case was not contingent liability but in praesenti and consequently allowing the development expenses of rs. 19,486 ?'2. heard shri a.n. mahajan, learned counsel for the applicant, and sri ratnakar bharti, learned counsel for the respondent.3. briefly stated the facts are that the assessee is a limited company engaged in the business of colonizing and land development besides having income from house property. it claimed development expenses of rs. 64,986 which were allowed at rs. 12,440 by the income tax officer. he, however, modified the figure to rs. 45,500 under section 154. the assessee went in appeal and the appellate assistant commissioner keeping in view the past history of the case as also the order of the tribunal, deleted the addition of rs. 19,486. the department filed appeal before the income tax appellate tribunal.4. it was contended that the appellate assistant commissioner was not justified in deleting the addition. the contention was not accepted by the tribunal and the appeal was dismissed. the matter has been referred under section 256 of the income tax act for opinion.5. similar question was raised and decided in cit v. development trust (p) ltd. (1991) 198 itr 766, where it was held that the tribunal was justified in holding that the estimated liability of development expenses was not a contingent liability but a liability in praesenti and hence an allowable deduction.6. in view of the above decision our answer to the question is in affirmative and against the department. the reference is accordingly disposed of.7. the parties shall, however, bear their own costs.