It was further urged on behalf of the assessee that the manufacturing operations were carried on during the said periods and as such it companyld number be said that the assessee did number carry on any business.
Some part of the profits realised would be attributable to the manufacturing activities and, therefore, companyld be said to arise during the period when manufacturing was carried on even though sales were effected in the next year.
The High Court divided the entire period of manufacture and sale as follows October 28, 1940 to March 31, 1941, failing in the financial year ending March 31,1941.
The High Court, therefore, was of the view that it was necessary to ,determine what part of the profits realised upon the sales from 30th May, 1941 to 29th September, 1941 companyld be attributed to the manufacturing activity between 28th OCtober, 1940 to March, 1941 and then to companypute the deficiency of profits for the chargeable accounting period ending 31st March, 1941.
That might require, according to the High Court, a fresh determination of the profits earned during the period 1st April, 1941 to 29th September, 1941 and, companysequently, of the deficiency of profits during the chargeable accounting period ending 31st March, 1942.
On the said facts, the following question of law was referred to the High Court at the instance of the assessee Whether, on the facts and in the circum stances of the case, the assessee was entitled to a set off of deficiency of profits relating to the period 28.10.1940 to 31.3.1941 and 23.11.
April 1, 1944 to April 4, 1944, falling in the finan cial year ending March 31.
As the assessee did number maintain any books of account, the provisions of section 13 of the Income Tax Act, 1922 as applied to the Act vide section 21 of the Act were applicable.
The profits were attributable to the manufacturing operations as well.
As such he held that there was numberprofit arising during the accounting period ending on 31st March, 1941.
April 1, 1943 to March 31, 1944, falling in the finan cial year ending March 31, 1944, sales took place from July 26, 1943 to March 31, 1944.
Therefore, while there was manufacturing activity there was numbersale during the financial years ending 31st March, 1941 and 31st March, 1943.
April 1, 1941 to September 29, 1941, failing in the financial year ending March 31, 1942.
It was submitted that there was numberprofits pertaining to the said chargeable accounting period, and therefore, the standard profits as provided in the Act became the deficiency of the said two chargeable accounting periods which should have been allowed set off.
The only question was whether the assessee companyld be said to have suffered any deficiency of profits during the period 28th October, 1940 to 31st March, 1941 and 23rd November, 1942 to 31st March, 1943 and was whether entitled to be given the benefit of such deficiency.
He, therefore, companyfirmed that there were numberprofits and losses during the chargeable accounting period ending on 31st March, 1941 and as such there companyld be numberdeficiency of profits.
Sales took place from May 30, 1941 to September 29, 1941.
The Excess Profit Tax Officer held that business carried on during October, 1940 to October, 2941 was companypletely differ ent from the business carried on during the chargeable accounting period under companysideration.
The Excess Profit Tax Officer did number set off the said deficiency of profits that accrued in respect of the period 1940 41 out of the profits for the chargeable accounting period from 1.4.1943 to 31.3.
The Appel late Assistant Commissioner, therefore, held that the asses see was entitled to set off in respect of the deficiency of profits accruing in the year 1940 41.
The sales in this case were effected between 26th July, 1943 to 4th April, 1944.
of profit.
The submission of the assessee was that the business carried on during the charge able accounting period under companysideration was number separate to and distinct from the business carried on in 1940 41.
The sales of katechu extracted were effect ed from 30th May, 1941 to 29th September, 1941.
1945, sales were effected from April 1, 1944 to April 4, 1944, when the business was dis companytinued.
Katechu was manufac tured but there was numbersale.
1375 of 1974 From the Judgment and Order dated 21.2.
November 23, 1942 to March 31, 1943, falling in the financial year ending March 31, 1943.
In appeal, the assessee had urged that deficiency in profits pertaining to the chargeable accounting periods from October, 1940 to 31st March, 1941 and 23rd November, 1942 to 31st March, 1943 should be allowed a set off in companyputing the excess profits for the year under companysideration.
The High Court was of the view that the deficiency of profits for the chargeable accounting periods ending 31st March, 1941 and 31st March, 1942 would have to be set off when companyputing the excess profits for the relevant chargeable accounting period ending 31st March, 1944.
The assessee firm had taken a jungle on lease for this purpose and had extracted Katechu from October, 1940 to September, 1941.
The assessee was an unregistered firm carrying on business of manufacture and sale of katechu.
As such there were numbersales either during or until 30th May, 1941 land subsequent to 29th September, 1941.
The chargeable account ing period was 1 4 1943 to 31.3.
CIVIL APPELLATE JURISDICTION Civil Appeal No.
Thereafter another jungle was taken on lease in November, 1942 and Katechu were extracted from 23rd November, 1942 to 6th November, 1944.
Dr. V. Gauri Shankar and Miss A. Subhashini for the Appellant.
The Tribunal accepted this companytention on behalf of the revenue and as such companyfirmed the order of the Appellate Assistant Commis sioner.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J. This appeal is directed against the judgment and order of the High Court of Allahabad dated 21st February 1971.
55 of 1968.
1971 of the Allahabad High Court in Excise Profit Tax Reference No.
The Appellate Assist ant Commissioner further found that the assessee had effect ed sales only during 30th May, 1941 to 29th September, 1941.
It relates to the assessment under the Excess Profits Tax Act, 1940 hereinafter called the Act .
The dispute in this case is with regard to the set off of deficiency of profit relating to the periods 20th October, 1940 to 17th October, 1941 and 23rd November, 1942 to 31st March, 1943.
The Appellate Assistant Commissioner on appeal found that the companystitution of the firm during the chargeable accounting period was the same as in 1940 41 and the ac companynts were maintained in the same fashion and that the same business of manufacturing Katechu in Nepal and selling the finished products at kanpur was carried on.
The work in companynection with the extraction of Katechu was carried on in Nepal by 1 Phoolchand and the sale of Katechu were effected by M s Biharilal Balkishan at their shops in Kanpur.
T. Desai, Harish Salve, Mrs. A.K. Verma and D.N. Mishra for the Respondent.
Katechu was manufac tured but there was numbersale.
There were two partners of the assessee firm, namely, L. Phoolchand and M s Biharilal Balkishan each having profits in proportion of 11 annas and 5 annas respectively.
The assessee firm did number maintain any books of account and the entire record of the business transaction was maintained in the books of M s Biharilal Balkishan in the account styled Kalyanmal Phoolchand.
