TMI Blog1952 (8) TMI 24X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer considered that excess profits tax was leviable on the profits of the business made during the accounting period. The assessee, on the other hand, challenged their liability on the ground that they were carrying on a profession and the profits depended mainly upon their personal qualifications. A suggestion was also made on behalf of the department that the profession consisted wholly or mainly in the making of contracts on behalf of other persons. There were thus three points raised: firstly, whether the assessee carried on a profession; secondly, whether in that case the profits depended mainly on their personal qualifications and, lastly, whether the profession consisted wholly or mainly in the making of contracts on behalf of othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ................................................................. 'business' includes any trade, commerce or manufacture or any adventure in the nature of trade, commerce or manufacture or any profession or vocation, but does not include a profession carried on by an individual or by individuals in partnership if the profits of the profession depend wholly or mainly on his or their personal qualifications unless such profession consists wholly or mainly in the making of contracts on behalf of other persons or giving to other persons of advice of a commercial nature in connection with the making of contracts................................ The reason for exempting from payment of excess profits tax the profits made which d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n which no capital expenditure is required or only capital expenditure of a comparatively small amount. In William Esplen, Son Swainston, Limited v. Commissioners of Inland Revenue [1919] 2 K.B. 731 the same learned Judge again said:- It is of the essence of a profession that the profits should be dependent mainly upon the personal qualifications of the person by whom it is carried on.............. Scrutton, L.J., in Commissioners of Inland Revenue v. Maxse [1919] 12 Tax Cas. 41 attempted, though with considerable diffidence, to define what is a profession and said:- I am very reluctant finally to propound a comprehensive definition. A set of facts not present to the mind of the judicial propounder, and not raised in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... remes there was a very large tract of country in which the matter became a question of degree; and where that was the case the question was undoubtedly, in his opinion, one of fact; and if the Commissioners came to a conclusion of fact without having applied any wrong principle, then their decision was final upon the matter. That view was followed by the Court of Appeal in Carr v. Inland Revenue Commissioners [1944] 2 K.B. 163. From an examination of these decisions it follows that a certain amount of skill and knowledge is required in every business; in a profession it is required in a large degree though that may not be the sole criterion for judging whether a particular business is a profession or not. It is urged that an aucti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to practice any of the indigenous systems of medicine or even homeopathy it is not necessary to be registered practitioner in India and yet it cannot be urged that the work of a Kaviraj or Hakim or that of a doctor practicing homeopathy is not a profession. Learned counsel has, therefore, pointed out that the mere fact that there is no statutory provision yet setting out the requirements for carrying on the business of an auctioneer does not make it any the less a business requiring skill and knowledge. The question whether the profits in the case before us mainly depended upon the personal qualifications of the partners of the assessee firm would depend upon the facts and circumstances of the case. The point was raised before the Appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m had been assessed to income-tax at least since 1929-30. The Tribunal, however, decided the point against the assessee, not on the facts of this particular case, but in the view that it took that in India no special qualifications were needed to set oneself up as an auctioneer. Sri Jagdish Swarup on behalf of the department has relied on the seventh paragraph of the appellate order of the Tribunal in which the Tribunal held that though in a sense they were exercising a profession but it was not one the income of which depended on personal qualifications of its partners. This finding was, however, not recorded, as would be apparent from the previous two paragraphs of the appellate order, on the facts and circumstances of the particula ..... X X X X Extracts X X X X X X X X Extracts X X X X
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