1949 (3) TMI 36

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... that firm Pujabhai and Goculdas were partners and there was also a third partner by the name of Chunilal Tribhovan. This firm certain profits and the question is whether the profits of this firm are liable to payment of excess profits tax. Now, Section 5 of the Act which deals with the application of the Act contains a special exception in the case of business done in an Indian State, and it expressly provides that the Act shall not apply to any business the whole of the profits of which accrue or arise in an Indian State. It is not disputed in this case that as far as the profits of this business started in Wadhwan State are concerned, the whole of the profit accrued or arose in Wadhwan State. But the Excess Profits Tax Officer having fa....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....at there was no reason whatever why the assessee should have started a new business at Wadhwan, and he discusses at some length the arguments which led him to the conclusion that this business was started solely for the purpose of avoiding excess profits tax. Now, it has been often repeated, and very rightly, that it is always open to a subject to avoid paying Income Tax or excess profits tax if he could legally and legitimately do so. The Legislature has exempted profit which accrue in an Indian State from the purview of the Excess Profits Tax Act. Therefore, it open to a subject in India to start business in an Indian State deliberately and openly, knowing full well that if he makes profit he will not have to pay excess profits tax on tho....