1954 (10) TMI 9

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....ndon profits it was treated as a resident company under Section 4-A(c), sub-clause (b), of the Income-tax Act. The assessee had chosen as its standard period the previous years for the assessment years 1936-37 and 1938-39 under Section 6(2)(b) of the Excess Profits Tax Act. Its profits for these years as determined in the respective income-tax assessments were as follows :-- Previous year for 1936-37 assessment year-- (a) Indian profits--Rs. 10,525 (b) London profits--Rs 66,386 Previous year for 1938-39 assessment year-- (c) Indian profits--Rs. 79,611 (d) London profits--Rs. 20,813 The Excess Profits Tax Officer treated the assessee as non-resident in the assessment year 1936-37 as its foreign profits were more than the Indian p....

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....I of the Excess Profits Tax Act, the London profits (Rs. 66,386) for 1936-37 income-tax assessment were rightly included by the Tribunal. " The High Court answered the question in the affirmative and the appellant obtained from the High Court the necessary certificate under Section 66A(2) of the Income-tax Act that this was a fit case for appeal to this Court. The sole question for our determination in this appeal is whether the Excess Profits Tax Officer was justified in splitting up the standard period as he did in order to arrive at the standard profits of the assessee and further whether the business profits of the assessee had to be determined first under Section 10 of the Income-tax Act and the question whether the assessee was a ....

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....counting period. There is nothing in the section to warrant the splitting up of the standard period, determining the business profits of each year separately and considering whether the assessee was a resident or non-resident for the particular assessment year. The profits of the assessee, Indian as well as foreign, were determined in the respective income-tax assessments as stated above and for the purposes of excess profits tax all the profits earned by the assessee during the standard period had to be added together. The Excess Profits Tax Officer should therefore have added together (a), (b), (c) and (d) above and not only (a), (c) and (d) as he did. The Excess Profits Tax Officer however considered the profits of assessment year 19....