Personal qualifications in profession matter for excess profits tax exemption where income mainly reflects skill, experience, and judgment.

Profits from a profession are excluded from excess profits tax where they depend wholly or mainly on the personal qualifications of the persons carrying it on. On the facts, the Tribunal could not rely on a broad generalisation that auctioneering in India required no special qualification; it had to assess the particular circumstances, including the firm's experience, the partners' skill and efficiency, the attraction of government work, and the firm's comparative success. The court held that auctioneering itself involved skill, experience and judgment in obtaining business and sales, so the assessee's income depended mainly on the partners' personal qualifications and the issue was answered in its favour.

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Issues: Whether the income of the assessee, carrying on auctioneers' work as a profession, depended wholly or mainly on the personal qualifications of the partners within the meaning of section 2(5) of the Excess Profits Tax Act.

Analysis: The exclusion from excess profits tax applies where the profits of a profession depend wholly or mainly on the personal qualifications of the persons carrying it on. The Tribunal had rejected the claim on a general view that auctioneering in India required no special qualification, rather than on the facts of the particular case. On the material found, the firm's long experience, the partners' qualifications and efficiency, the attraction of substantial government work, and the comparative success of the firm were relevant circumstances bearing on whether the profits were mainly attributable to personal qualifications. The nature of auctioneering itself also involved skill, experience, and judgment in securing business and obtaining sales.

Conclusion: The income of the assessee depended mainly on the personal qualifications of the partners, and the question was answered in favour of the assessee.

Ratio Decidendi: Where the profits of a profession are substantially attributable to the personal skill, experience, and qualifications of the persons carrying it on, the exclusion under section 2(5) of the Excess Profits Tax Act applies, and the matter cannot be decided on a mere generalisation divorced from the facts of the particular case.

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