Apportionment of business profits based on facts upheld where no statutory formula existed for British India sourcing.

Where business profits are to be apportioned between taxable and non-taxable territories, the issue is factual and requires a just and equitable estimate in the absence of any statutory formula. The Tribunal found that the assessee had a business organisation in British India that promoted sales, that the groundwork for the transactions was done there, and that the contracts were completed on the record facts. Because the apportionment was based on relevant material and the circumstances of the case, it was not to be disturbed. The profit treated as accruing or arising in British India was accordingly upheld at Rs. 54,400 for the assessment year 1942-43.

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Issues: Whether the profit arising from the assessee's sales transactions was attributable to operations carried on in British India, and what proportion of such profits could justly and equitably be treated as accruing or arising in British India.

Analysis: The sales fell into different factual categories, but the underlying question was one of factual apportionment. The Tribunal, on the supplementary statement of the case, found that the assessee had a business organisation in British India which promoted sales, that the ground work for the transactions was done there, and that the contracts were completed in the manner found on the record. In the absence of any statutory formula, the proportion of profits attributable to British India necessarily involved approximation and some element of estimate. Where the Tribunal's apportionment is based on relevant material and the circumstances of the case, it should not be disturbed.

Conclusion: The apportionment made by the Tribunal was upheld, and the profit accruing or arising in British India was held to be Rs. 54,400 for the assessment year 1942-43.

Final Conclusion: The appeals succeeded and the assessee obtained the benefit of the Tribunal's factual apportionment of profits as income accruing or arising in British India.

Ratio Decidendi: Where the apportionment of business profits between taxable and non-taxable territories depends on facts and no fixed statutory formula exists, a Tribunal's reasonable estimate based on relevant material will not be interfered with.

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