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1. Determination of whether the activities carried out by the assessee during the accounting period constitute investments or business activities. Detailed Analysis: The case involved an appeal regarding excess profits tax assessment for a Hindu undivided family that had previously closed its piece goods business. The family had deposited a significant amount in banks on interest and later made withdrawals for investments in colliery shares and advances to individuals. The income derived from these activities was initially assessed under the Indian Income-tax Act as "other sources." However, the assessee later filed a revised return, claiming the income as profits from business. The Excess Profits Tax Officer initially rejected the revised return, but the Commissioner directed a fresh assessment based on the revised return. The Income-tax Officer, the Appellate Assistant Commissioner, and the Tribunal all concluded that the assessee had not carried on any business during the relevant accounting period. The assessee argued that the income from interest should be considered business income rather than mere investment income. The Tribunal considered various factors, such as the limited number of individuals from whom interest was received, the low interest rate, lack of a formal business establishment, absence of a money-lending license, and the scale of transactions, in determining that the activities were more in the nature of investments than business. The assessee contended that the inference drawn by the Tribunal was a question of law based on proved facts. However, the Court emphasized that the determination of whether the assessee was engaged in business was a mixed question of fact and law. Citing a relevant case, the Court highlighted that unless there was no evidence to support the Tribunal's finding, the Court was bound to uphold it. In this case, the Court found that there was sufficient material to support the Tribunal's conclusion that the activities were not business activities but investments. In conclusion, the Court upheld the Tribunal's view that the nature of the activities carried out by the assessee was more in the nature of investments than business activities. The judgment was agreed upon by both judges, and no costs were awarded in the matter. This detailed analysis provides an overview of the legal judgment delivered by the Patna High Court regarding the classification of the assessee's activities as investments or business activities during the relevant accounting period.
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