TMI Blog1954 (10) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... to the Excess Profits Tax Act provides that business profits during the standard period are to be computed on the principles on which business profits are computed for purposes of income-tax under Section 10 of the Income-tax Act. Business profits under Section 10 may comprise Indian as well as foreign profits. All these profits would come within the computation of business profits and they would be determined as such in the income-tax assessment for the particular assessment year. The question whether Indian or foreign profits are greater would become relevant for determining the status of the assessee, whether he is a resident or non-resident, and would be considered later when the assessable income came to be determined. It is only a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 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 profits and determined the standard profits for that year at Rs. 10,525 ignoring the foreign profits Rs. 66,386 altogether. The standard profits according to him were the aggregate of (a), (c) and (d) (Rs. 10,525, Rs. 79,611 and Rs. 20,813) and he made his order accordingly. The Appellate Assistant Commissioner confirmed the orders of the Excess Profits Tax Officer and a further appeal was taken by the assessee to the Income-tax Appellate Tribunal. The Tribu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer 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 resident or non-resident under Section 4A of the Act was to be considered after the determination of those profits. Section 6 of the Excess Profits Tax Act prescribes how the standard profits of a business have to be computed. It provides, so far as is material for our purposes :- " (1) For the purposes of this Act, the standard profits of a business in relation to any chargeable accounting period shall, subject to the provisions of sub-sections (3) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 1936-37 separately and on a consideration of the Indian and foreign profits comprised in that assessment he determined that the assessee was a non-resident in that year and therefore those foreign profits were not to be considered at all while arriving at the figure of standard profits. We are of the opinion that the Excess Profits Tax Officer was in error when he excluded the foreign profits for the assessment year 1936-37 from computation. Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X
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