R.P.Mookerjee, J. - (1.) This is a reference under Section 66 (1), Income-tax Act, raising a question dependant on an interpretation of E. 2, Sch. II with the explanatory sub-para, of Excess Profits Tax Act (xv [15] of 1940).
(2.) The assessee company, Ruby General Insurance Co. Ltd., is a company incorporated in India carrying on different branches of insurances including Life, Eire, Marine & general insurances. We are not concerned with the Life Insurance branch of the business but only about the method of calculation to be adopted for determining the excess profits tax payable in respect of the other branches for the accounting period commencing from 1-9 1939 and ending December 1939. The Co. having exercised option as regards standard profits under the second proviso to Section 6 (1), Excess Profits Tax Act, such standard profits have to be calculated by applying the statutory percentage to the average capital employed in the business during the relevant chargeable accounting period.
(3.) The only point for decision in the present reference is how the average amount of capital employed in the business during the chargeable accounting period is to be computed.;