Satyanarayana Rao, J.-The two questions that were referred to us by the Income-Tax Appellate Tribunal under section 66(1) of the Indian Income-tax are as follows:

(1) Whether, on the facts and in the circumstances of the case, the film hire derived by the assessee under agreements which provided for fixed hire charges in respect of exhibition 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 5 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 business of producing and distributing films. The films are distributed to exhibitors within, and also without, Britis

Click Here to Read the rest of this document