Law:

Section:

Section 2(5) of the Super Profits Tax Act, 1963 - Chargeable profits - Meaning of - Assessment year 1963-64 - Whether definition of 'chargeable profits' under section 2(5) does not prevent assessing authority under Act from recomputing total income calculated under Income-tax Act, if found necessary -Held, yes Words & Phrases : 'Chargeable profits' occurring in section 2(5) of Super Profit Tax Act, 1963 FACTS The assessment of the assessee-company was made on certain amount under the Act. For the purpose of assessment under the Act, the chargeable profits were taken at the same figure as assessed under the Income-tax Act. Thus the Super Profits tax assessment followed the income-tax assessment. Both the assessments came ultimately before the Tribunal which confirmed the AAC's order rejecting the assessee's claim for deduction in relation to certain expenses in fitting diesel engines in place of petrol engines to some vehicles. In the super profits tax assessment, the Tribunal held that the income-tax assessment wherein the claim for deduction was rejected, having become final, the total income as determined in proceedings under the Income-tax Act would have to be taken as chargeable profits for the super profits tax assessment as well, and no further deduction from the chargeable profits was permissible. On reference : HELD The definition of 'chargeable profits' under section 2(5) does not prevent the assessing authority under the Act from recomputing the total income under the Income-tax Act, if found necessary. Though the total income of the assessee as computed under the Income-tax Act may normally be the 'chargeable profits' for assessment under the Super Profits Tax Act, in cases where a recomputation becomes necessary, either as a result of a mistake in the assessment under the Income-tax Act or for any other justifiable reason, the ITO who makes assessment under the Super Profits Tax Act can recompute the total income under the Income-tax Act notwithstanding that the total income of the assessee has been earlier computed and assessed under the Income-tax Act. The expression 'computed under the Income-tax Act, 1961' cannot be read as computed by the…

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