Law:

Section:

Section 7 read with section 5 of the Excess profit Tax Act, 1940 - Deficiency of profits - Assessee, during proceeding chargeable accounting period assessed to excess profit tax - After that period he discontinued business for certain years and started a new business in chargeable accounting period and earned profits which were below standard profits - Therefore he claimed set off for deficiency of profit in chargeable accounting period with profits of preceding chargeable accounting period for reducing tax - Whether two businesses which were carried on by assessee during two chargeable accounting periods in question, were both business covered by section 5 - Held, yes - Whether since both businesses attracted applicability of section 5 and both of them were carried on by some person therefore it must be held that they constituted one business - Held, yes - Whether therefore deficiency in chargeable accounting period must be adjusted towards excess profit earned in preceding chargeable accounting period under section 7 - Held, yes FACTS The assessee was an individual who was carrying on business in cloth and cotton. During the preceding chargeable accounting period, he was assessed to excess profits tax. However, the assessee closed his business and went to his place of origin. He returned to the place where he was carrying on the business then started a new business. During that chargeable period of new business the assessee earned profits which were far below the standard profits of his earlier business which had been assessed to the excess profits tax mentioned above. The assessee claimed that the deficiency of profits in his business, should be set off for the purposes of reducing the excess profits tax which had been assessed on his business for the preceding chargeable accounting period. However, claim of the assessee was rejected by the Appellate Tribunal. On reference : HELD The two businesses, which were carried on by the assessee during the two chargeable accounting periods in question, were both businesses covered by the provisions of section 5, so that the Act applies to both of them. Further, both the business were admittedly owned by the same…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492