- (1.) The Respondent, the assessee, is a limited company and has its head office in London. It has three branches in India. The control and management of its business during the five chargeable accounting periods (commencing from 1-9-1939 and ending on 31-3-1944) were in London but as its Indian profits exceeded the London profits it was treated as a Resident Company under S. 4A(c), Sub-cl. (b), Income-tax Act.
(2.) The assessee had chosen as its standard period the previous years for the assessment year 1936-37 and 1938-39 under S. 6(2)(b), Excess Profits Tax Act. Its profits for these years as determined in the respective income-tax assessments were as follows : Previous year for 1936-37 assessment year- (a) Indian Profits - Rs. 10,525 (b) London Profits - Rs. 66,386 Previous year for 1938-39 assessment year- (c) Indian profits - Rs. 79,611 (d) London Profits - Rs. 20,813
(3.) The Excess Profits Tax officer treated the assessee as non-resident in the assessment year 1936-37 as its foreign profits were more than the Indian profits and determined the standard profits for that year at Rs. 10,525 ignoring the foreign profits Rs. 66,386 altogether. The standard profits according to him were the aggregate of (a), (c) and (d) (Rs. 10,525, Rs. 79,611 and Rs. 20,813) and he made his order accordingly.;