https://www.taxtmi.com/caselaws?id=289608 The Madras HC held that an arrangement by which an assessee transferred part of its managing agency work and diverted corresponding profits to newly formed companies fell within section 10A of the Excess Profits Tax Act because its dominant purpose was tax avoidance. The Court treated the transaction as a course of action, not a mere cessation of business, and relied on surrounding circumstances showing that the assessee initiated the restructuring, the new companies took over the relinquished work, the same family interests continued to control the business, and supervision was retained while profitable rights were surrendered. On that material, the Department proved that the arrangement was mainly designed to reduce excess profits tax, and the question was answered in the affirmative against the assessee. en-us Mon, 23 Nov 1959 00:00:00 +0530 Sat, 08 Aug 2020 09:57:27 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=289608 The Madras HC held that an arrangement by which an assessee transferred part of its managing agency work and diverted corresponding profits to newly formed companies fell within section 10A of the Excess Profits Tax Act because its dominant purpose was tax avoidance. The Court treated the transaction as a course of action, not a mere cessation of business, and relied on surrounding circumstances showing that the assessee initiated the restructuring, the new companies took over the relinquished work, the same family interests continued to control the business, and supervision was retained while profitable rights were surrendered. On that material, the Department proved that the arrangement was mainly designed to reduce excess profits tax, and the question was answered in the affirmative against the assessee. Case-Laws Income Tax Mon, 23 Nov 1959 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=289608