- (1.) The sole controversy in this appeal centres round the point as to whether or not excess profits tax is payable on the sum of Rs. 20,005 received by the respondent from Messrs Parakh and Co. by way of rent for the dyeing plant let out to them during the chargeable accounting period.
(2.) The respondent (Sri Lakshmi Silk Mills Ltd. is a manufacturer of silk cloth, and as a part of its business it installed a plant for dyeing silk yarn. During the chargeable accounting period (1-1-1943 to 31-12-1943) owing to difficulty in obtaining silk yarn on account of the war it could make no use of this plant and it remained idle for some time. On 20-8-1943 it was let out to Messrs E. Parakh and Co. on a rent of Rs. 4,001 per month. The Excess Profits Tax Officer by his assessment order dated 11-6-1945 included the sum of Rs. 20,005 realized as rent for five months, in the profits of the business of the respondent and held that excess profits tax was payable on this amount. This order was confirmed on appeal by the Appellate Assistant Commissioner and on further appeal by the Income-tax Tribunal. The Tribunal, however, on being asked referred the following question of law to the High Court for its opinion : "Whether in the circumstances of the case, the assessee's income of Rs. 20,005 is profits from business within the meaning of S. 2 (5), Excess Profits Tax Act and therefore or otherwise liable to pay excess profits tax -
(3.) The High Court answered the question in the negative. This is an appeal by special leave from this decision.;