Alphabet Inc., a non-resident foreign company operates a ship for carriage of goods (Marina) and a cruise ship (Bringo) for carriage of passengers…

19. As per section 44B, in the case of a non-resident engaged in the business of operation of ships (other than cruise ship), 7.5% of the following amounts would be deemed to be the profits and gains from such business: (a) paid or payable, whether in or out of India, to the assessee or to any person on his behalf on account of the carriage passengers, livestock, mail or goods shipped at any port in India; and (b) received or deemed to be received in India by on behalf of the assessee on account of the carriage of passengers, livestock, mail or goods shipped at any port outside India. The above amounts will include demurrage and handing charges. As per section 44BBC, in the case of a non-resident engaged in the business of operation of cruise ships and satisfying the conditions specified thereunder, 20% of the following amounts would be deemed to be the profits and gains from such business: (a) paid or payable to the assessee or to any person on his behalf on account of the carriage of passengers and (b) received or deemed to be received by or on behalf of the assessee on account of the carriage of passengers. Since Alphabet Inc. satisfy all the conditions prescribed for the purpose of section 44BBC, its total income would be computed as follows: Particulars Amount in crores Income from Ship for carriage of goods Amount received in Singapore on account of carriage of goods Shipped at Mumbai port Freight Demurrages charges Handling charges 1.20 0.18 0.12 Amount received in India on account of carriage of goods shipped at Singapore port Freight including demurrage and handling charges 1.00 Total receipt 2.50 Less: Expenses incurred – Not allowed Nil Presumptive income u/s 44B @ 7.5% of 2.5 crores 0.1875 Income from Cruise Ship Amount received in India on account of carriage of passengers form Mumbai port 8.00 Amount received outside India for tickets sold abroad for ports touching India. 12.00 Less: Expenses incurred – Not allowed Nil Presumptive income u/s 44BBC @20% of ₹ 20 crores 4.00 Income from Other Sources Interest on Fixed Deposits 3.50 Total Income 7.6875