( 1 ) THIS is a Reference made by the Income-tax Appellate Tribunal, Calcutta Bench, in respect of the assessment of the East India Prospecting Syndicate, Calcutta, to excess profits tax.

( 2 ) THE Syndicate claimed that it was not liable to pay excess profits because it was not carrying on a business within the meaning of Section 2 (5) of the Excess Profits Tax Act, 1940. The Tribunal found that it was carrying on a business but it was requested by the syndicate to state a case for the opinion of this Court. The Tribunal stated a case and formulated the following question for the opinion of this Court. "whether in the facts and circumstances of the case, the assessee can be said to be carrying on a 'business' within the meaning of Section 2 (5) of the Excess Profits Tax Act, so as to bring the income in question within the charge to excess profits tax?"

( 3 ) THE facts of the case giving rise to this dispute can be shortly stated "as follows:

( 4 ) SOMETIME in the year 1919 the Villiers Colliery Company Limited obtained a prospecting licence from the Raja of Talchar in respect of about 8 sq. miles (less 1000 bighas) of land under which there were seams of coal. On