TMI Blog1951 (6) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... effect the liability of the assessee company to excess profits tax on its profits made in the calendar year 1943 and the subsequent chargeable accounting periods; (ii) Whether in the circumstances of the case the Tribunal was competent in law to overrule the decision of the Appellate Assistant Commissioner dated November 14, 1945 ? The facts briefly are that Amritsar Rayon Silk Mills, Ltd., started as a private limited liability company in 1934. The total issued capital of the company, consisted of 140 shares of ₹ 500 each. The managing director of the company, Shorilal, acquired 40 of these shares. On April 21, 1935, the share capital was increased to 180 shares and on January 5, 1938, to 400 shares. After this Shorilal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax (Second Amendment) Act, 1941, was the avoidance or reduction of liability to excess profits tax, he may, with the previous approval of the Inspecting Assistant Commissioner, make such adjustments as respects liability to excess profits tax as he considers appropriate so as to counteract the avoidance or reduction of liability to excess profits tax which would otherwise be effected by the transaction or transactions. It is clear that on a proper interpretation of this section where there is material on the basis of which the Excess Profits Tax Officer can form the opinion that a certain transaction was effected with the main object of avoiding or reducing the amount of excess profits tax payable, he is entitled to made suitable adju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the opinion that the main purpose of the transfer by Shorilal was the avoidance or reduction of liability to Excess Profits tax. This opinion can not be questioned in any way and the first question therefore must be answered in the affirmative. One other point was raised in connection with question No. 1, Namely that the transfer was not made by the assessee in the case and Section 10A contemplates transactions effected by the assessee. The wording of Section 10A, sub-section (1), however, does not warrant such an interpretation. The transaction may be entered into by any-one and as long as its main purpose is the avoidance or reduction of excess profits tax the provisions of Section 10A would be attracted, there is therefore on force ..... X X X X Extracts X X X X X X X X Extracts X X X X
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