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1961 (5) TMI 4 - SC - Income TaxWhether on the facts of the case a loss of ₹ 22,981 is allowable in computing the income of the assessee chargeable to the excess profits tax ? Held that:- As to the first ground, it seems clear to us that under the third proviso to section 5 of the Excess Profits Tax Act, 1940, where the profits etc. of a part of the firm's business accrued or arose at Bhatinda, that part of the business shall for the purpose of the said section be deemed to be a separate business. The High Court was in error in thinking that the third proviso to section 5 of the Excess Profits Tax Act did not touch the question which the High Court had to answer. On the contrary, we think that the proviso answers the question against the assessee. We agree that if the income did not arise or accrue in Bhatinda but the whole of it arose in Delhi, the third proviso would have no application. If, however, part of the income etc. arose in Bhatinda, then that part of the business was a separate business for the purposes of the Excess Profits Tax Act and the losses incurred at Bhatinda could not be taken into account. We are of the view that, on the facts found, the answer to the question must be in favour of the appellant and against the assessee. Civil Appeal be allowed.
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