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TMI Blog1951 (9) TMI 53X X X X Extracts X X X X X X X X Extracts X X X X ..... of films in Indian States is not exempt from excess profits tax as profits accruing or arising in the Indian States within the meaning of the third proviso to Section 6 of the Excess Profits Tax Act. (2)Whether, on the facts and in the circumstances of the case, the films hire derived by the assessee under agreements which provided for hire at a percentage of the collections in respect of the exhibition of films in Indian States is not exempt from excess profits tax as profit accruing or arising in the Indian States within the meaning of the third proviso to Section 5 of the Excess Profits Tax Act. The assessee is a public limited company whose registered office is at Salem and is incorporated in British India. It carried on the busines ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was paid to him at the time of the delivery of the picture in the Native State, either by sending the railway receipt by V.P.P. or by tendering the film directly to the exhibitor, or perhaps even by sending the railway receipt to a bank for collection. Whichever method was adopted by the assessee, it leaves no room for doubt that until the picture was delivered to the exhibitor, the exhibitor did not pay a single pie to the assessee. On these facts it was contended strenuously on behalf of the department by Mr. Rama Rao Sahib, the learned counsel for the Income-tax Commissioner that, as the contracts which are the source of the profit were entered into in British India it must be held that in respect of both the types of contracts, the prof ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the third proviso to Section 5 of the Excess Profits Tax Act. We searched in vain to find any trace of this argument before any of the Income-tax authorities who had to deal with this matter. It is not a question which has been referred to us by the Appellate Tribunal; nor did the Income-tax Commissioner ask for a reference of this question to this Court. It is further claimed by the learned counsel for the Income-tax Commissioner that the question actually referred to us are wide enough to cover the question of apportionment, for it is said that it is open to us to find that not the whole of the profits but only a part of the profits accrued and arose in a Native State. That may be so; but we have to understand the questions referred ..... X X X X Extracts X X X X X X X X Extracts X X X X
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