S. C. SEN, J. ( 1 ) THE Tribunal has referred to this court, the following question of law under Section 256 (1) of the Income-tax Act, 1961 ("the Act") :"whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was correct in holding that the loss in exchange on remittance of profits amounting to Rs. 3,27,978 in the case of R. A. No. 116 (Cal.) of 1983/rs. 3,61,739 in the case of R. A. No. 114 (Cal.) of 1983 was not allowable deduction in computing the business income liable for taxation ?" ( 2 ) THE facts as stated by the Tribunal are as under : the assessees are non-resident companies and certain profits earned by them had to be transmitted to the United Kingdom. The calculation of the profits was initially made on the basis of the exchange rate prevailing at the time of declaration thereof. At the time of remittance of these profits, the exchange rate having varied, the assessees claimed losses of Rs. 3,27,978 and Rs, 3,61,739 consequent thereto. According to the Income-tax Officer the losses did not relate to the assessee's business and were, therefore, not allowable. On appeal, it was argued on behalf of the assessees that the remittances of profits did relate to their business and it was contended that the profits for the years 1972 to 1975 had been taxed by covering the profits in pound sterling and at the then prevailing rate of exchange wherein one pound was equal to Rs. 19. Subsequently, there was a devaluation of the rupee and one pound became equal to Rs. 15. The Commissioner (Appeals) was, however, of the opinion that the loss or gain arising out of conversion of the assessee's assets and liabilities as on the first day of the accounting year was a notional loss or gain, as the case may be. He consequently rejected the claims of the assessee made in this behalf. On second appeal before the Tribunal, the claims were again rejected by the Tribunal with the following observation :"here, the income has been earned in India and is to be assessed in India. The whole of that was in rupees. Converting it into pound sterling may be a feature of the assessee's business for purpose of calculating the profits of its head office. The whole of that was in rupees. Converting it into pound sterling may be a feature of the assessee's business for purpose of calculating the profits of its head office. But we are not concerned with the profits or losses on transmission of the rupees because they arise after the income had been actually earned. From the point of view of income-tax, what is to be taxed is the income earned in India and not the income that ultimately is received by the assessee's head office in the U. K. When the actual profits were taxed in the earlier years the rupee was taken as the basis and if the devaluation had taken place in these years and pounds had to be converted into rupees naturally the incomes would have been much higher. In any case the loss or profit would be suffered and gained by the assessee after the ascertainment of the profits in the course of transmission to the U. K. and we are not concerned with what the assessee actually received there. In view of the reasoning given by the authorities below and the aforesaid discussion we are of the opinion that there is no force in these appeals which are accordingly dismissed. " ( 3 ) THE principles stated by the Tribunal find support from a Division Bench decision of this court in the case of Namdang Tea Co. Ltd. v. CIT [1982] 138 ITR 326. There, on similar facts, it was held by a Division Bench of this court that where the business of the assessee was carried on in India and the income from the business accrued to the assessee in India, the. devaluation of the Indian rupee had no direct impact on the profit and loss of the business carried on in India inasmuch as the assessments were also made in India. ( 4 ) THE devaluation of the Indian rupee would have resulted in a loss to the business if the assessment had been made in London. Therefore, the loss claimed by the assessee was not allowable. ( 5 ) IN that case, the assessee was a non-resident company and carried on the business of growing, manufacturing and selling tea in India and all its gardens and factories were situated in India and the income from the business accrued to the assessee in India. Therefore, the loss claimed by the assessee was not allowable. ( 5 ) IN that case, the assessee was a non-resident company and carried on the business of growing, manufacturing and selling tea in India and all its gardens and factories were situated in India and the income from the business accrued to the assessee in India. The accounts in India were recorded in rupee currency. The main accounts at the head office of the assessee in London were recorded in sterling. On the basis of the accounts of the assessee in the head office, tax was assessed in India. The assessee claimed that because of devaluation it had suffered loss and claimed deduction on that account. ( 6 ) THE facts of this case are more or less similar. The assessees are nonresident companies and carried on business in India. The income that is earned in India is transmitted to England to the head office. The accounts are maintained in the head office. But that cannot possibly have any impact on account of income or the position in law. The assessee is a non-resident company and is liable to be assessed to tax on the total income of any previous year which is received or deemed to be received in India or accrues or arises in India. Therefore, it is the Indian part of the income which will be included in the total income. The assessees may have income from various other sources which will be taken into account when the assessees are to be taxed in England. Section 5 (2) of the Act does not take into account all such income. It is the Indian part of the total world income that is taxed in India. What happens to the income after it is earned or the destination of that income or calculation of that income in England in pound sterling cannot possibly have any bearing on the question of income of the assessee in India. We are of the opinion that the Tribunal has taken a correct view of the matter. ( 7 ) ON behalf of the assessee, our attention was drawn to a decision of this court in the case of CIT v. Calcutta Electric Supply Corporation Ltd, [1987] 166 ITR 797. We are of the opinion that the Tribunal has taken a correct view of the matter. ( 7 ) ON behalf of the assessee, our attention was drawn to a decision of this court in the case of CIT v. Calcutta Electric Supply Corporation Ltd, [1987] 166 ITR 797. Unfortunately, the attention of the court was not drawn to the earlier decision of another Division Bench of this court in the case of Namdang Tea Co. Ltd. [1982] 138 ITR 326. ( 8 ) IN any event, the facts of that case are entirely distinguishable. In that case, the assessee, a foreign company, had declared dividends in England. The business of the assessee was carried on in India. In order to discharge the legal obligations arising out of declaration of dividends, the assessee had to remit monies from India to England. In that process, the assessee suffered certain losses. On that finding of fact, the court held that the expenditure was allowable. The facts of this case are entirely dissimilar and are more akin to the facts in the case of Namdang Tea Co. Ltd. ( 9 ) IN view of the above, we answer the question in the affirmative and in favour of the Revenue.