1986 (5) TMI 55

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....erating revenue as adopted in surtax assessment." 3. The appellant is a non-resident shipping company having its head office in Sweden under section 44B of the Income-tax Act, 1961 ('the Act') the amounts referred to clauses (i) and (ii) of sub-section (2) thereof are to be taxed in accordance with the provisions of sub-section (1) thereof. For the assessment years under consideration, i.e., 1977-78 to 1979-80 it filed surtax returns disclosing chargeable profits at Rs. 10,04,610, Rs. 7,50,009 and Rs. 8,01,757 respectively and claimed statutory deductions at Rs. 1,47,66,367, Rs. 1,21,87,040 and Rs. 1,30,19,523 respectively. The assessee-company claimed that it incurred loss on non-Indian operations and as such the entire world capital of t....

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....e the sum ascertained in accordance with rules 1, 2 and 3, diminished by an amount which bears to that sum the same proportion as the amount of the aforesaid income, profits and gains bears to the total amount of its income, profits and gains." 6. From the above, it is apparent that rule 4 laying down the computation of capital comes into play only 'where a part of the income, profits and gains of a company is not includible in its total income as computed under the Income-tax Act.' Rule 4 shall, therefore, not come into play when this condition, namely, a part of the income, profits and gains of a company is not includible in its total income as computed under the Act is not fulfilled. Sections 44B was introduced with effect from 1-4-1976....