Judgement FACTS :- Nahalchand Laloochand (assessee) was a firm which did the business of the selling agency of the Brady group of Mills and the Kohinoor Mills. The total income as assessed to tax by the Income-tax Officer for the assessment year 1947-43 was Rs. 4,96,944, including a sum of Rs. 1,65,000 Which was credited on December 20, 1945, in the account of Bai Jivibai who was the widow of one of the partners of the assessee firm who had died in 1940. The assessee contended that Bai Jivibais husband had given, her gold ornaments which she had sold and the amount of Rs. 1,65,000 was the sale proceeds which was credited to her account. 2. The taxing authorities held that the case of the assessee was not true and the sum of Rs. 1,65,000 represented income of the assessee from an undisclosed source. The Excess Profits Tax Officer also took the view that the amount represented undisclosed profits of the assesses firm from business. 3. Two appeals were preferred to the Appellate Tribunal, one under the Indian Income-tax Act, 1922, and the other under the Excess Profits Tax Act, 1940, and both appeals were dismissed. In its order the Tribunal observed as follows : "In the present case the sum of Rs. 1,65,000 has been held by the Tribunal as profits of the assessee firm from some undisclosed sources. If the finding in respect of this item was that these were the suppressed sales of the assesees business or income relating to the business carried on, the assessees position would have been stronger, and in our opinion, an apportionment had to be made. But this item has been treated income from some undisclosed source in respect of which, there was no income subsequent to that date. In other words, the source which yielded that income did not yield any income after December 2, 1945, the date when the entry was made in the books of account. There could be no question of apportioning this item as required by the above section. In respect of this item the chargeable accounting period does not go beyond the date mentioned above. The proviso, therefore, has no application to the facts of the present case. We think that the Excess Profits Tax Officer was right in not treating this item as the income of the chargeable accounting period under reference." 4. In respect of this item the chargeable accounting period does not go beyond the date mentioned above. The proviso, therefore, has no application to the facts of the present case. We think that the Excess Profits Tax Officer was right in not treating this item as the income of the chargeable accounting period under reference." 4. The following questions were referred to the High Court : (1) Whether the Revenue Authorities are wrong in taking for the purpose of excess profits tax assessment the whole sum of Rs. 1,65,000 (rupees one lac and sixty five thousand) in the excess profits tax period ending the thirty-first day of March one thousand nine hundred and forty-six ? (2) Whether on a true construction of the relevant provisions of the Act the Revenue Authorities ought to have in any event averaged the whole of the said amount of Rs. 1,65,000 (One lac and sixty five thousand) over the entire period of Excess Profits Tax and business profits tax as well as specially so when the appellants in the excess profits tax appeal even expressed their willingness to have the assessment for business profits tax purposes modified to a corresponding extent ? and (3) Whether in view of the finding of the Tribunal that the said sum of Rs. 1,65,000 (one lac and sixty five thousand) was from some undisclosed source outside the assessees business the Tribunal was right in law in taking the said sum into consideration for the purposes of assessment of excess profits tax ? 5. CHAGLA, C.J :- (His Lordship, after stating facts and holding that the amount of Rs. 1,65,000 was an income from business and therefore liable to payment of excess profit tax, proceeded :) 6. The other question raised by Mr. Kolah is that in any view of the case this amount should be apportioned as provided by the proviso to R. 1, sch. I, to the Excess Profits Tax Act. Now, certain dates are important. The sum of Rs. 1,65,000, as already stated, was credited in the cooks of account of the assessee firm on December 20, 1945. The Excess Profits Tax Act came to an end on March 31, 1946, and the assessees accounting period is the Samwat Year commencing from November 5, 1945, to October 24, 1946. Now, certain dates are important. The sum of Rs. 1,65,000, as already stated, was credited in the cooks of account of the assessee firm on December 20, 1945. The Excess Profits Tax Act came to an end on March 31, 1946, and the assessees accounting period is the Samwat Year commencing from November 5, 1945, to October 24, 1946. Therefore, the Excess Profits Tax Act was not applicable during the whole of the relevant accounting period of the assessee. The Legislature realised the difficulty of determining profits of a broken period. In this particular case although the profits of the accounting period could only be ascertained at the end of the accounting period the profits made subsequent to March 31, 1946, were not liable to payment of excess profits tax, and the Legislature had to demise some machinery whereby profits could be ascertained for the period ending with March 31, 1946. In this particular case the broken period would be from November 5, 1945, to March 31, 1946. Therefore, the third proviso to r. 1 of sell. I gave the power to the excess Profits Tax Officer to apportion profits for the broken period in the light of the profits made during the whole of the accounting period. But this proviso also gives the power to the Excess Profits Tax Officer to apportion, profits having regard to special circumstances, and the view taken both by the Officer and the Tribunal is that in this particular case there are special circumstances which entitled the Excess Profits Tax Officer not to apportion the profits so far as the sum of Rs. 1,65,000 is concerned. The Excess Proxies Tax Officer did apportion the profits of the assessee other than the profit of Rs. 1,65,000, but when it came to the sum of Rs. 1,65,000 the view he took was that the receipt of this amount was on December 20, 1945, and that no further income was derived from this particular source and therefore no case for apportionment had been made out. This view was also taken by the Tribunal, and the question is whether this view is justified in law. 7. In our opinion the power given to the Excess Profits Tax Officer under the proviso is to apportion profits and also in special cases not to apportion profits. This view was also taken by the Tribunal, and the question is whether this view is justified in law. 7. In our opinion the power given to the Excess Profits Tax Officer under the proviso is to apportion profits and also in special cases not to apportion profits. But whether he apportions profits or he does not apportion them, he is dealing with profits and not with items in the profits made by the business of the assessee. In this connection it is very material to bear in mind that for the purposes of the Excess Profits Tax Act the business of the assessee is an entity. The assessee may have several businesses, but when profits have to be ascertained for making it liable to excess profits tax, all the businesses of the assessee must be looked upon as one and the profits made by different business are not different profits but one profit made by one business carried on by the assessee as an entity. The further fact to bear in mind is that profits cannot be ascertained till the end of the accounting period of the assessee. A certain business may yield a profit at a particular time, but it cannot be said that that constitutes a profit of the assessee because there may be a loss in other businesses and the result of those losses may be that the profit made in one business may be wiped out and at the end of the accounting period the assessee may make a loss although one business has yielded a profit. Now, what the Excess Profits Tax Officer has done in this case is that he has picked out this item of Rs. 1,65,000, crystallised it as it were on December 20, 1945, has put it in the category of profits and has said that as far as this sum of Rs. 1,65,000 is concerned he will not apportion it but will make the assessee pay excess profit tax on the whole amount. 8. The error into which the officer has fallen is this. It could not have been predicated of this sum of Rs. 1,65,000 that it constituted the profits of the assessee on December 20, 1945. 1,65,000 is concerned he will not apportion it but will make the assessee pay excess profit tax on the whole amount. 8. The error into which the officer has fallen is this. It could not have been predicated of this sum of Rs. 1,65,000 that it constituted the profits of the assessee on December 20, 1945. Till the accounting period of the assessee came to an end, which was on October 24, 1946, it was impossible to state that the assessee had either made profits or losses, because if there were losses in the other businesses of the assessee, this sum of Rs. 1,05,000 was capable of being set off against those losses. 9. Sir Nusserwanji has emphasised the fact that this sum of Rs. 1,65,000 was earned from a source which was not the ordinary normal source of the assessees business and he has further emphasised the fact that the source came to an end during the chargeable accounting period and no possible question could arise of that source yielding any further income or profit, and therefore it is suggested that it was open to the Excess Profits Tax Officer to treat this as a special case or special circumstance and refuse to apportion this sum of Rs. 1,65,000. Now, there is a clear fallacy underlying this argument. To suggest that this particular source which yielded Rs. 1,65,000 ceases to exist is to misunderstand and misapprehend the whole basis of the Excess Profits Tax Act, If all the businesses of the assessee are for the purposes of the Excess Profits Tax Act one entity, then you cannot pick out one of the businesses and say that that business has come to an end had therefore you must ascertain the profits of that business. So long as any business of the assessee is going on, the profits cannot be determined for the purposes of the Excess Profits Tax Act till the end of the accounting period of the assessee. It is clear that the special circumstance which the Legislature contemplated in the proviso is not the special circumstance of a particular business of the assessee being discontinued. It is clear that the special circumstance which the Legislature contemplated in the proviso is not the special circumstance of a particular business of the assessee being discontinued. The special circumstance which might have been contemplated by the Legislature was a case where, as the Tribunal itself has pointed out, the books of the assessee were closed before the end of the accounting period and the profits of all the businesses carried on by the assessee were ascertained. But the special circumstance contemplated by the Legislature could not possibly have been the case where one particular business ceases to yield income although the other businesses of the assessee were being carried on and the profits of all the businesses could not be ascertained till the end of the accounting period. To put it briefly, the power of the Excess Profits Tax Officer is with regard to profits not with regard to items in the profit and loss account of the assessee. If the Tribunal were right, it would lead to this startling result that it would be open to the Excess Profits Tax Officer to treat this sum of Rs. 1,65,000 as profits subject to payment of excess profit tax, and if there were losses in other businesses, he may apportion those losses and set off those losses against the sum of Rs. 1,65,000 which he has already ascertained as a profit as of December 20, 1945. Therefore, whereas the losses would be apportioned, this individual item of profit of Rs. 1,65,000 would remain unapportioned and would be treated as a separate item for the purpose of determination of the assessees liability to pay excess profit tax. 10. Sir Nusserwanji has also argued that there was nothing to prevent the Legislature from giving the special power to the Excess Profits Tax Officer to treat the profit of a business which has come to an end during the chargeable period as a separate profit. Now, it is settled law that, at least so far as this Court is concerned, the profit earned by an assessee in and business cannot be ascertained until the end of The accounting period, and, therefore, we would be assuming something which is contrary to the fundamental principles of business profits underlying the Income-tax Act if we were to hold that the legislature wanted to treat something as profit which in law can never be a profit. If, therefore, Rs. 1,65,000 were not profits of the assessee on December 20, 1945, and the profits were not ascertained to be profits at the end of the accounting period, the whole basis of the action taken by the Excess Profits Tax Officer was erroneous. His action was based only on the ground that this sum of Rs. 1,65,000 constituted profit of a business which had ceased to exist after the chargeable period and the income from which was received and ascertained prior to the chargeable accounting period. The Excess Profits Tax Officer seems to have overlooked the difference between a receipt and a profit. All that could be said of the sum of Rs. 1,65,000 was that it was a receipt in the hands of the assessee on December 20, 1945. But the difference is vital and fundamental between a receipt and a profit. Every receipt in the hands of an assessee is by no means a profit or his income. It is only when that receipt is taken into consideration with various other items in the account and when the account is finally made up at the end of the accounting period that it could be predicated that a certain sum is a profit of the assessee or a loss of the assessee. Therefore, in our opinion, the assessee was entitled in law to have the apportionment with regard to the whole amount of Rs. 4,96,944 and the Excess Profits Tax Officer was not entitled to exclude the sum of Rs. 1,65,000 from the apportionment. 11. We answer question No. 1 in the affirmative, and No. 2 also in the affirmative. 12. We may point out that the assessee offered to have the sum of Rs. 1,65,000 subjected to the payment of business profit tax for the period beginning April 1 to October 31, 1946, and Mr. Kolah stands by that offer. 13. Our answer to Question No. 3 is : In view of our decision as to what the finding of the Tribunal is, this question does not arise. 14. No order as to costs. Answers accordingly.