Dipak Kumar Sen, J. - (1.) M/s. Shinwa Kaium Kaisha Ltd., the assessee, is a non-resident shipping company incorporated in Japan. The assessee was assessed to income-tax in India for the assessment year 1971-72, the corresponding accounting year ending on March 31, 1971. The Income-tax Officer computed the income received or deemed to be received in India by the assessee under Rule 10(ii) of the Income-tax Rules, 1962, the material part whereof 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 business..."
(2.) The total income, i.e., world income of the assessee, computed at Rs. 4,18,771,188, was taken to be the total profits and gains of the assessee.
(3.) The total receipts of the business of the assessee was ascertained at Rs. 46,333,095,484 being only the receipts on account of freight. The receipts accruing or arising in India only on account of freight received or deemed to have been received in India was ascertained at Rs. 4,594,480,546. The proportion of the said two figures was applied to the total profits and gains of the assessee to arrive at the profits and gains assessable in India.;