Dependence on personal qualifications: auctioneering profits treated as arising from partners' skill, favouring exclusion from business taxation.

Income from the applicant's auctioneering activity was held to depend mainly on the partners' personal qualifications as contemplated by the exclusion under the Excess Profits Tax Act, because factual features - longstanding firm reputation, partners' specialised experience (including technical valuation expertise), a substantial share of government work, and demonstrably superior performance versus local competitors - indicate profits flowed from personal skill rather than external conditions. The governing principle excludes from "business" those activities whose profits turn wholly or mainly on personal qualifications; the operative effect favours the applicant.

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Issues: Whether, in the circumstances of the case, the income derived from the applicant's activity as auctioneers depended wholly or mainly on the personal qualifications of the partners as contemplated by Section 2(5) of the Excess Profits Tax Act.

Analysis: The issue turns on whether the facts and circumstances of the applicant's business show that profits were mainly attributable to the personal qualifications of the partners. Section 2(5) excludes from "business" those professions where profits depend wholly or mainly on personal qualifications, subject to exceptions. The tribunal had characterised the activity as a profession but rejected the claim that profits depended mainly on personal qualifications on a general view that no statutory qualifications or licences are required to practise as auctioneers in the jurisdiction. The appellate facts, however, include the firm's long-standing reputation, partners' specialised experience (including a partner's engineering qualification aiding valuation), a substantial portion of income derived from government work, and superior performance relative to other local firms. These factual findings, if accepted, can support the conclusion that profits depended mainly on personal qualifications rather than on war-related or other external conditions.

Conclusion: The income from the applicant's auctioneering activity depended mainly on the personal qualifications of the partners within the meaning of Section 2(5) of the Excess Profits Tax Act; the reference is answered accordingly in favour of the applicant.

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