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TMI Blog1985 (12) TMI 29X X X X Extracts X X X X X X X X Extracts X X X X ..... is set out below : " In any case in which the Income-tax Officer is of opinion that the actual amount of the income accruing or arising to any non-resident person whether directly or indirectly, through or from any business connection in India or through or from any property in India or through or from any asset or source of income in India... cannot be definitely ascertained, the amount of such income for the purpose of assessment to income-tax may be calculated:-... (ii) on any amount which bears the same proportion to the total profits and gains of the business of such person (such profits and gains being computed in accordance with the provisions of the Act), as the receipts so accruing or arising bear to the total receipts of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... include the totality of receipts of the assessee's business both from shipping as well as from non-shipping sources and such non-shipping receipts could be held to have arisen or accrued in connection with the business of the assessee in India. The Appellate Assistant commissioner found the assessment was inconsistent and he held that the Income-tax Officer having found that a part of the non-operating revenue having been including the world profits, the same should have also been considered as part of the total receipts. He directed the Income-tax Officer to recompute the Indian income with reference to the world income afresh. Being aggrieved, the Revenue preferred an appeal before the Incometax Appellate Tribunal. It was held by the Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the proceedings below. Our attention was drawn to rule 10(ii) of the Income-tax Rules, 1962. It appears to us that the expression " receipt " has not been defined in the Act but the meaning of the expression " receipt ", in our view, has been made clear in various sections of the Act as noted hereafter: "Section 5.-(2) Subject to the provisions of this Act, the total income of any previous year of a person who is a non-resident includes all income from whatever source derived which (a) is received or is deemed to be received in India in such year by or on behalf of such person; or (b) accrues or arises or is deemed to accrue or arise to him in India during such year. Explanation 1.-Income accruing or arising outside India shall not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l provisions of rule 10(ii) earlier: From a plain reading of the relevant statutory provisions, it appears to us that the expressions " accrued " or " arisen " or " received " or deemed to be received " have been used in the Act and they must be given their plain meaning in the absence of any particular definition. We are unable to appreciate the logic of the Income-tax Officer in confining the business receipts of the assessee only to freight. The other items like interest on discount, adjustment of currency and general average have obviously arisen in connection with the shipping business of the assessee and have been received or deemed to have been received by the assessee in its business and made assessable to tax. The formula laid ..... X X X X Extracts X X X X X X X X Extracts X X X X
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