2,55,485 1 0 for the chargeable accounting period companymencing from 21st October, 1941 and ending on 8th November, 1942 On the business income of Rs.
LXVIII of 1949 from a Judgment of the High Court of Bombay dated 18th March 948 Chagla C.J. and Tendolkar J. in a Reference under the Excess Profits Tax Act, 1940.
The assessees thereupon applied to the Tribunal requiring them to draw up a statement of the case and refer it to the High Court at Bombay for decision of the question of law involved, and the Tribunal according ly stated the case and referred the following question Whether on the facts stated above income accruing or aris ing to the assessees on sales made in British India of goods manufactured in Raichur situated outside British India has been rightly held by the Tribunal as income accruing or arising in British India and was liable to excess profits tax.
2,55,485 1 0 companyputed on the same basis, was also imposed on the assessees.
After unsuccessful appeals to the Appellate Assistant Commissioner, Bombay, the assessees carried the matter to the Income tax Appellate Tribunal, Bombay, but with numberbetter result.
2,49,615, being profits accruing or arising in British India in respect of the respondents branch at Raichur in Hyderabad State and run in the name of Messrs. Ahmed Sons.
1,61,807 for the chargeable accounting period companymencing from 31st October, 1940 and ending on 20th October, 1941 on the business income of Rs.
6,08,761, which included a sum of Rs.
The companytention was re jected and the whole of the profits arising out of the sales in British India of the oil produced in Raichur were includ ed in the assessments.
By another order dated 28th March, 1944 the same officer assessed the firm to excess profits tax in a sum of Rs.
7,46,561, which included a sum of Rs.
Part of such oil was also sold at Raichur, but the profits derived from such sales were number included in the assessment, and numberquestion number arises in regard to such profits.
The respondent firm hereinafter referred to as the assessees are carrying on the business of manufacturing and dealing in oil at Raichur in the Hyderabad State and at Bombay which, during the relevant period, was part of what was then known as British India.
It waS secondly companytended that even assuming that this was number companyrect the profits of that part of the business, which was carried on at Raichur, did number accrue or arise inthe Hyderabad State because the profits arose the sale of the oil in Bombay and therefore the assessees companytention was incorrect.
For the succeeding period companymencing from 21st October, 1941, and ending on 8th November, 1942, a tax of Rs.
Both the assessment orders were appealed against to the Appellate Assistant Commission er but without any success.
By an order dated 27th March, 1944, the Excess Profits Tax Officer, Circle III, Bombay, assessed the respondent to excess profits tax in the sum of Rs.
The Income tax Tribunal agreed with them.
APPEAL Civil Appeal No.
The learned Judges, after stating the facts of the case, framed the question thus Whether on the facts stated above the profits of a part of the business of the assessees accrued or arose in an Indian State.
In the letter of reference they indicated their view on the question referred by stating that the manufactured article received or brought into British India did number include any income, profits or gains, and that such profits and gains, having accrued only after the sale had taken place, accrued or arose in British India.
The reference was heard by Chagla C.J. and Tendolkar J. and they were of opinion that the question as framed by the Tribunal did number reallybring out the companytroversy be tween the parties.
2,49,615 which was said to have accrued or arisen from sales in Bombay of oil manufactured at Raichur.
For the chargeable accounting period companymencing from 31st October, 1940, and ending on 20th October, 1941, the assessees were assessed to excess profits tax in a sum of Rs.
M. Munshi S. K. Aiyar and N. K. Gamadia with him for the respondents.
The Commissioner of Income tax has companye in appeal from that decision.
May 4.
They own three mills at Bombay and one at Raichur for manufacturing oil from ground nuts, and they sell the oil partly at Raichur and partly at Bombay.
6,08,761, including a sum of Rs.
1,61,807 on their business income of Rs.
C. Setalvad, Attorney General for India, B. Sen with him for the appellant.
The Incometax Appellate Tribu nal on appeal drew up a statement of case and referred the following question of law to the High Court Whether on the facts as stated above income accruing or arising to the assessee on sales made in British India of goods manufactured in Raichur situated outside British India has been rightly held by the Tribunal as income accruing and arising in British India and was liable to excess profits tax ?
