It is stated that for AY 2002-03, the Income Tax Department by the assessment order  under Section 143 (3)/147 read with Section 144-C (13) of the Act computed profits of the Petitioner by adopting 'deemed profitability' @ 10% of the revenues/sales. This was done with reference to Section 44BB of the Act. 35% of such profits were held to be related to marketing activities. 75% of the marketing activities were held attributable to a Permanent Establishment ('PE') of the Petitioner in India. Effectively, 2.625% of the sales revenue was held to be the profit attributable to the PE in India and this was held to be taxable @ 40%. As a result, 1.054% of the gross sales became the effective tax payable in India (40% of 26.25% of 10% of the sales).