Limited statutory incorporation excludes attached proviso, so the income-tax deduction could not reduce excess profits tax profits.

The Excess Profits Tax Act incorporated only the specified charging clauses of Section 4(1) of the Indian Income-tax Act and did not adopt the third proviso granting a limited foreign-income exemption. As a result, the Rs. 4,500 deduction allowed under that proviso was not available in computing profits chargeable to excess profits tax. The later Act's own charging scheme, provisos and First Schedule showed that the Legislature intended to import the charge only, not the exemption, and a proviso attached to the wider section could not be read into the excess profits tax computation by implication.

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Issues: Whether the deduction of Rs. 4,500 allowed under the third proviso to Section 4(1) of the Indian Income-tax Act was allowable in computing profits chargeable to excess profits tax under Section 5 of the Excess Profits Tax Act.

Analysis: Section 5 of the Excess Profits Tax Act incorporated only a specified portion of the charging part of Section 4(1) of the Indian Income-tax Act, namely clause (b) sub-clauses (i) and (ii) and clause (c), and did not incorporate the provisos to that section. The third proviso belonged to the larger scheme of Section 4(1) and created an income-tax exemption for a limited amount of foreign income brought into British India, whereas the Excess Profits Tax Act contained its own scheme of charge and exclusion. The structure of the later Act, its own provisos, the First Schedule, and the absence of any reference to the Rs. 4,500 deduction showed that the Legislature intended to adopt only the charging provision and not the exemption contained in the proviso. The nature of the proviso also supported this view, because the amount exempted under income-tax law would otherwise escape excess profits tax entirely.

Conclusion: The deduction of Rs. 4,500 under the third proviso to Section 4(1) of the Indian Income-tax Act was not allowable in computing profits chargeable to excess profits tax under Section 5 of the Excess Profits Tax Act.

Final Conclusion: The referred question was answered against the assessee and the claimed deduction could not be carried into the excess profits tax computation.

Ratio Decidendi: Where a later statute incorporates only a specified charging portion of an earlier section, a proviso attached to the larger section is not incorporated unless it is expressly or necessarily included.

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