TMI Blog1949 (3) TMI 36X X X X Extracts X X X X X X X X Extracts X X X X ..... nd 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 failed to get at these profits resorted to a mos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee 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 those profits. There is no liability whatever to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Department how an assessee should conduct and carry on his business, and even if an assessee deliberately chose to start a business in a part of India where no excess profits tax is payable, he was perfectly entitled to do so and he was within the law in doing so. In my opinion, therefore, the order made by the Excess Profits Tax Officer was clearly wrong and in excess of the jurisdiction conferred by him by the statute. The question is not properly framed. We will reformulate the question and the question will read thus : Whether in view of the provisions of the third proviso to Section 5 of the Act, the Tribunal was justified in holding that Section 10A applies to the case ? To that the answer is in the negative. The Commissio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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