ARIJIT PASAYAT, C.J.

At the instance of the Revenue, the following questions have been referred under s. 18 of the Companies (Profits) Surtax Act, 1964 (in short "the Act"), r/w s. 256(1) of the Income-tax Act, 1961 (hereinafter referred to as "the IT Act"), by the Income-tax Appellate Tribunal, Cochin Bench (in short "the Tribunal")

"Whether, on the facts and in the circumstances of the case

(i) the Tribunal is right in law in holding that unless the total income is assessed to tax, there can arise no liability under the provisions of the Companies (Profits) Surtax Act

(ii) is the assessment under the Companies (Profits) Surtax Act wrong and against law ?"

The factual position as set out in the statement of case is as follows : The assessee, Taiyo Gyogyo Kabushiki. Kaisha, is a multinational company of Japan with diverse business interests ranging from shipping to sugar refining. During the previous year relevant to the asst. yr. 1979-80, the assessee's ships visited Indian ports for shipment of cargo. Gross freight earnings of Rs. 2, 75, 06, 151 for shipment of cargo from Indian ports were subjected to tax in accordance with the provisions of s. 172(4) of the IT Act, 1961.