The word “business” has been defined by the Act in S. 2 (5) of the Indian Income-tax Act, 1922 as follows:

“Business” includes any trade, commerce or manufacture or any adventure in the nature of trade, commerce or manufactures or any profession or vacation ….”

 It means any continued activity of a person which yields profits and which is in the nature of trade, commerce or manufactures. It may even be any adventure in the nature of trade, commerce or manufacture. A proviso was added to this definition in the year 1940 in these terms:

‘Provided further that all businesses to which this Act appiles carried on by the same person shall be treated as one business for the purposes of this Act.”

The effect of the proviso is that if a man is carrying on a number of activities whether of the same or of the different natures, all these various businesses are treated as one. The same person, if engaged in the manufacture of hardware, oils, textiles, motor tyres, bicycles and owning mills for his diverse activities in different places and also trading in merchandise and doing contract business is deemed to carry on a single business. All the businesses that he carries on are lumped together and treated as one business for the purpose of levying the tax and calculating the profits. The proviso has made an amalgam of all the businesses of one individual and it is in view of this amalgam that proviso 3 of S. 5 has to be considered. It seems to me that what has been amalgamated by the definition has again been made separate by the proviso to S. 5 If a number of businesses carried on by a person are situate in different places, than the effect of the proviso is to again treat them as separate business under the description of the phrase “part of a business.” In other words, if a man is carrying on manufacture in textiles in Bombay, a shop at Mysore, has a distillery in Allahabad and has an oil mill in Gwalior, then for the purpose of S. 5 all these four trades are part of the business within the meaning of proviso 3 to S. 5, one part situtate in one place and another part situate at another place and if any of these parts produce profits at the place of the business, that place being in an Indian State, than proviso 3 would have application. I think that the affect of the language of proviso 2 of S. 5 is to give colour to proviso 3 as being complementary to it and providing for converse case to those arising under this proviso concerning non-residents. Illustratively it may be said that proviso 2 would cover the case if the manufacturing business of the respondent was situate in Bombay and his sales exclusively were made at Raichur provided he was a non-resident. In that event excess profits duty would be chargeable on a part of the profits attributable to the part of the business in Bombay, or in other words, to those business operations that were being carried on in Bombay. The converse case where the manufacturing operations are being carried on in Raichur by a resident in India and the sales are made exclusively in Bombay is apparently covered by proviso 3 because a part of the business being situate in Raichur profits attributable to that part of the business out of the total sale proceeds could only be said to accrue at the place of manufacture.