Business profits computed from income-tax findings may exclude an earlier deleted addition when the same accounting period governs both assessments.

Where business profits under the Business Profits Tax Act are computed by reference to profits already determined in income-tax proceedings, an addition earlier deleted in those proceedings need not be carried into the excess profits computation. The Tribunal relied on its prior deletion of the amount under the proviso to section 13 of the Indian Income-tax Act, 1922, and, as the assessment year and chargeable accounting period were the same and no contrary material was shown, it was justified in excluding the same amount from excess profits.

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Issues: Whether the Tribunal was justified in deleting the addition made in the income-tax assessment while determining the assessee's business profits and excess profits under the Business Profits Tax Act.

Analysis: The assessment year and chargeable accounting period were common to both proceedings, and the business profits under the Business Profits Tax Act were computed by starting with the business profits determined in the income-tax assessment. The addition of Rs. 76,92,566 made under the proviso to section 13 of the Indian Income-tax Act, 1922, had already been deleted by the Tribunal in the income-tax proceedings. In the absence of any material showing a different result in the connected reference, the Tribunal was justified in following its own earlier order and excluding the same amount from the excess profits computation.

Conclusion: The issue was answered in favour of the assessee, and the Tribunal's deletion of the addition was upheld.

Ratio Decidendi: Where the computation under the Business Profits Tax Act is founded on business profits already determined in income-tax proceedings, an addition earlier deleted in those proceedings may be excluded in the corresponding excess profits computation when the connected decision governs the same accounting period and no contrary material is shown.

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