TaxTMI Login
AI OCR ✕Convert scanned orders, printed notices, PDFs and images into clean, searchable, editable text within seconds. Starting at 2 Credits/page
Try Now →Just a moment...
AI OCR ✕Convert scanned orders, printed notices, PDFs and images into clean, searchable, editable text within seconds. Starting at 2 Credits/page
Try Now →
Press 'Enter' to add multiple search terms. Rules for Better Search
Use comma for multiple locations.
---------------- For section wise search only -----------------
Accuracy Level ~ 90%
of 
Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of Press 'Enter' after typing page number.
Issues: Whether, for computing the average capital employed in the assessee's business during the chargeable accounting period, the value of the buildings, plant, machinery and electric fittings of the weaving department, which had been acquired for the business but had not yet commenced production, was liable to be excluded under Schedule II, rule 1 of the Excess Profits Tax Act.
Analysis: The statutory scheme under section 6 and Schedule II, rule 1 computes standard profits by reference to the capital employed in the business, and the rule speaks to the capital represented by assets acquired for the business. The expression "capital employed" was held not to require that the particular assets must have been actively used or put into production during the accounting period. Where funds have been laid out in acquiring assets for the business and those assets remain available for that business, the capital is to be treated as employed, even if the assets were not yet productive in the relevant period.
Conclusion: The exclusion of the value of the weaving department assets was not in accordance with Schedule II, rule 1. The amount spent on those assets was capital employed in the assessee's business and had to be included in the average capital; the question was answered in the negative, in favour of the assessee.
Ratio Decidendi: For excess profits tax computation, capital employed includes the cost or value of assets acquired for the business and kept available for it, and their actual use or production during the accounting period is not a necessary condition.
TaxTMI 
TaxTMI 
