BHAGABATI PRASAD BANERJEE, J. ( 1 ) THE Tribunal has forwarded the following question of law to this court under Section 256 (1) of the Income-tax Act, 1961 :" Whether the Income-tax Appellate Tribunal was, after finding that the agreement between the. assessee-company and the Indian companies did create a business connection and on the facts and in the circumstances of the case, justified in holding that no part of the payment of Rs. 22,50,000 received by the non-resident assessee-company from the Indian companies accrued or arose in India or was deemed to accrue or arise in India and was subject to tax ?" ( 2 ) THE assessment year involved is 1976-77 for which the previous year ended on December 31, 1975. The facts of this case are as follows : ( 3 ) THE assessee, a non-resident company, entered into an agreement with the West Bengal Industrial Development Corporation Ltd. for setting up a factory in West Bengal for production of automotive tyres and tubes. As per the terms of this agreement, the foreign company was to supply note and technical data for the construction of the factory in India as also to supply various items of plant and send technical personnel for supervision of the construction of the factory and commissioning of the plant. In return, the foreign company was to receive a total amount of Rs. 33. 75 lakhs in three instalments, viz. , the first instalment of Rs. 11. 25 lakhs within 60 days of the approval date, the second instalment of Rs. 11. 25 lakhs within 60 days of completion of the work by the foreign company and the third instalment of Rs. 11. 25 lakhs within six months after the date of successful commercial production of tyres. A similar agreement was entered into by the foreign company with the Andhra Pradesh Tyres and Tubes Ltd. ( 4 ) DURING the assessment year 1976-77, the assessee received the first instalment of Rs. 11. 25 lakhs from each of the two Indian companies, viz. , the West Bengal Industrial Development Corporation Ltd. and the Andhra Pradesh Tyres and Tubes Ltd. The Income-tax Officer held that the sum of Rs. 22. 50 lakhs thus received by the foreign company was taxable in the assessment year 1976-77 under Section 9 (1) (i) of the Income-tax Act, 1961. , the West Bengal Industrial Development Corporation Ltd. and the Andhra Pradesh Tyres and Tubes Ltd. The Income-tax Officer held that the sum of Rs. 22. 50 lakhs thus received by the foreign company was taxable in the assessment year 1976-77 under Section 9 (1) (i) of the Income-tax Act, 1961. ( 5 ) THE assessee appealed to the Commissioner of Income-tax (Appeals) who held that since the agreement was finalised in England and as no part of the services was rendered in India and the money was also received outside India, the assessee had no business connection in India. Hence, the Commissioner of Income-tax (Appeals) concluded that the sum of Rs. 22. 50 lakhs received by the foreign company was not taxable. ( 6 ) AGAINST the aforesaid order of the Commissioner of Income-tax (Appeals), the Revenue preferred an appeal before the Tribunal and the Tribunal upheld the order of the Commissioner of Income-tax (Appeals) and held as follows :" In the present case, as will be noted from the facts stated above, admittedly, no services whatsoever had been rendered by the assessee-company to the two Indian companies in India during the previous year under consideration. Therefore, even if the agreement constituted the bond between the assessee-company and the Indian companies which could be legitimately constituted as a business connection no part of the income flowing to the assessee-company through this business connection would be taxable in the hands of the assessee-company. . . " ( 7 ) THE findings of the Tribunal have not been challenged by raising a question as to the perversity of such a finding. The meaning of "total income" as provided in Section 5 of the Act is clear in this regard which would be evident from Sub-section (2) as under :" (2) Subject to the provisions of this Act, the total income of any previous year of a person who is a non-resident includes all income from whatever source derived which - (a) is received or is deemed to be received in India in such year by or on behalf of such person ; or (b) accrues or arises or is deemed to accrue or arise to him in India during such year. Explanation 1.--Income accruing or arising outside India shall not be deemed to be received in India within the meaning of this Section by reason only of the fact that it is taken into account in a balance-sheet prepared in India, explanation 2.--For the removal of doubts, it is hereby declared that income which has been included in the total income of a person on the basis that it has accrued or arisen or deemed to have accrued or arisen to him shall not again be so included on the basis that it is received or deemed to be received by him in India. " ( 8 ) THE Explanation to Section 9 (1) (i) (a) of the Act provides as follows :"explanation.--for the purposes of this clause- (a) in the case of a business of which all the operations are not carried out in India, the income of the business deemed under this Clause to accrue or arise in India shall be only such part of the income as is reasonably attributable to the operations carried out in India. " ( 9 ) FROM the provisions of the Act, it is clear that there must be some sort of activity from which it would be evident that the income has been received or accrued or deemed to have been received in India and unless it could be shown that the income is received or deemed to have been received or accrued in India, such income could not be taxed. The Tribunal found that no service whatsoever has been rendered by the assessee-com-pany to the Indian companies during the previous year. In that event, the said sum received in India could not be taxed. ( 10 ) IN view of that finding of fact made by the Tribunal which has not been challenged as perverse, this court has to accept that finding and proceed accordingly. In view of such a finding, it must be held that the Tribunal was right in holding that no part of the payment of Rs. 22,50,000 received by the non-resident assessee-company from the Indian companies accrued or arose in India or was deemed to accrue or arise in India and was subject to tax. Accordingly, the question of law referred to this court in this reference is answered in the affirmative and in favour of the assessee.