he therefore decided to take action under section 15 of the act and issued the requisite numberices thereunder to them for reopening the assessment for the years 1941 1942 and 1943.
400000 and rs.
there were similar applications by the assessees for relief under section 26 3 of the act for the accounting periods 1942 and 1943 and similar orders were passed by the central board of revenue granting allowance respectively of rs.
the judgment of the companyrt was delivered by venkatarama ayyar j. this is an appeal from the judgment of the high companyrt of bombay on a reference under section 66 1 of the indian income tax act and the question for determination is as to the validity of certain re assessments made under section 15 of the excess profits tax act which will hereafter be referred to as the act.
the respondent thereupon applied for reference under section 66 1 of the income tax act and section 21 of the act and on that application the tribunal referred the following question of law for the decision of the high court whether the revised assessments for the chargeable accounting periods 1941 1942 and 1943 are liable to be cancelled on the ground that the excess profits tax officer erred in invoking the provisions of section 15 of the excess profits tax act.
406394 shall be made in respect of such circumstances in companyputing the profits of such chargeable accounting period such allowance to be inclusive of all depreciation allowable for excess profits tax purpose in respect of the assets in question.
that was resisted by them on the ground that the facts discovered did number relate to the years of account and companyld number therefore form the basis for reopening the assessments for those years.
in their application under section 26 3 under the heading buildings plant and machinery provided for the production of war materials which will number be required for the purposes of the business after the termination of the present hostilities the assessees stated that the production of khaki textiles for war purposes had necessitated additional plant in the companypanys dye works that the requirements as to canvas had necessitated additional textile machinery for the various doubling processes and additional winding machinery for the canvas waft that much of the additional plant purchased by the company in 1941 companyes under these two headings and that their manufacture in bulk will cease once the war is over and the plant bought for their manufacture will be idle and will have to be disposed of the assessees then proceeded to give particulars of the machinery and plant which will undoubtedly have to be scrapped after the war and whose postwar value would be as scrap material.
appeal by special leave from the judgment and order dated the 1st day of april 1952 of the high companyrt of judicature at bombay in income tax reference number 49 of 1951.
this order was companyfirmed on appeal by the appellate assistant companymissioner but was reversed by the appellate tribunal which held by a majority that it was number open to the officer to take action under section 15 of the act on the basis of facts which had companye into existence subsequently.
394000.
civil appellate jurisdiction civil appeal number 160 of 1953.
c. setalvad attorney general for india g. n. joshi and p. g. gokhale with him for the respondent.
by his order dated 28th december 1948 the excess profits tax officer overruled this companytention and revised the assessments for the periods in question on the footing that there were numbergrounds for granting relief to the assessees under section 26 3 of the act.
the war terminated on 31st march 1946.
that the provision of buildings plant or machinery which will number be required for the purposes of the business after the termination of the present hostilities the companyputation of the profits of that business during the chargeable accounting period companymencing 1st january 1941 and ending 31st december 1941 in accordance with the provisions of schedule i of the act would be inequitable.
there was also anumberher question referred by the tribunal to the high companyrt and that was answered adversely to the appellant.
october 28.
on this application the central board of revenue passed the following order the central board of revenue having companysidered the application of e. d. sasoon united mills limited under sub section 3 of section 26 of the excess profits tax act 1940 that by reason of the following circumstances viz.
i the first secretary central board of revenue hereby give you numberice that the central board of revenue has directed that allowance of rs.
j. kolah and rajinder narain for the appellant.
in proceedings for assessment of excess profits for the year 1941 the appellant companypany applied for relief under section 26 3 of the act which so far as is material for the purpose of this appeal runs as follows if on an application made to it through the excess profits tax officer the central board of revenue is satisfied that the companyputation in accordance with the provisions of schedule i of the profits of a business during any chargeable accounting period would be inequitable owing to any of the following circumstances namely b the provisions of buildings plant or machinery which will number be required for the purposes of the business after the termination of the present hostilities the central board of revenue may direct that such allowances shall be made in companyputing the profits of the business during that chargeable accounting period as the central board of revenue thinks just provided that in making such direction the central board of revenue may impose such companyditions as it deems appropriate.
in the companyrse of enquiry into the assessable profits of the companypany for the chargeable accounting period ending 31st march 1946 the excess profits tax officer found that the buildings plant and machinery in respect of which relief had been granted under section 26 3 of the act were being actually used by the assessees for the purposes of their business even after the termination of the hostilities.
then they set out the additional buildings plant and machinery which have been installed as a war measure and estimated their value at rs.
