SANKAR PRASAD MITRA, J.

( 1 ) THIS is a reference under Section 66 (2) of the Indian Income-tax Act, 1922, The Tribunal has sent to this court a statement of the case on the following question :"whether, on the facts and in the circumstances of the case, the property tax paid by the assessee in Japan on its vessels was allowable as deduction under Section 10 (2) (xv) of the Income-tax Act, 1922 ?"

( 2 ) THE assessment years are 1956-57, 1957-58, 1958-59 and 1959-60. The corresponding previous years were the financial years ending on the 31st of March, 1956, 1957, 1958 and 1959, respectively. The respondent is a nonresident shipping company. Its registered office is in Japan. It has been assessed to income-tax for the assessment years aforesaid under the Indian Income-tax Act, 1922, with respect to net Indian earnings. The assessee did not maintain separate accounts for its Indian business ; its net profits on the basis of its world profit and loss account was computed under the Indian Income-tax Act, 1922, and, thereafter under Rule 33 of the Rules, the Indian net profit was worked out in the proportion as between the gross Indian earnings and the gross world earnings. In the matt

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