- (1.) This is a reference under Section 66(1), Income-tax Act, as applied to the Excess Profits Act by Section 21 of the latter Act.
(2.) The assesses, Messrs Haji Salar Bux Haji Ramzan of Tanda, district Faizabad, besides having business in British India, has cloth business at Bhutwal in Nepal which is outside British India. On the assessment made by the Excess Profits Tax Officer the whole of the assessee's income from business, whether carried on in British India or outside British India, was assessed to Excess Profits Tax. The assessee claimed that from the entire profits computed from the business outside British India, that is, Bhutwal cloth business, a sum of Rs. 4500 should be deducted in accordance with the third proviso to Section 4 (1), Income-tax Act.
(3.) On appeal the Appellate Assistant Commissioner decided in favour of the assessee, but on further appeal the Appellate Tribunal held that the proviso was not applicable and the assessee was not entitled to the deduction of Rs. 4500 from the assessable income.;