Section 44BB aggregation covers mobilisation charges and expense reimbursements in oil exploration receipts.

Section 44BB was applied as a complete code for computing deemed profits from oil exploration services, requiring inclusion of amounts paid or payable in connection with the services and facilities covered by the provision. Mobilisation and demobilisation charges were treated as part of the aggregate receipts even where the voyage was undertaken outside Indian territorial waters, and reimbursement of actual expenses incurred on behalf of the client was also held includible in the gross receipts. The text notes that both issues were covered by binding precedent followed in the assessee's own earlier years, leaving no basis for exclusion from the computation base.

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Issues: (i) Whether mobilisation and demobilisation charges attributable to voyage undertaken outside Indian territorial waters were includible in the gross receipts for computing deemed profits under section 44BB of the Income-tax Act, 1961; (ii) Whether reimbursement of actual expenses incurred on behalf of the client was includible in the gross receipts under section 44BB of the Income-tax Act, 1961.

Issue (i): Whether mobilisation and demobilisation charges attributable to voyage undertaken outside Indian territorial waters were includible in the gross receipts for computing deemed profits under section 44BB of the Income-tax Act, 1961.

Analysis: The receipts were held to be covered by the statutory fiction in section 44BB, which requires aggregation of amounts paid or payable in connection with services and facilities for oil exploration activities. The receipts on account of mobilisation and demobilisation had no independent exclusion merely because the voyage was undertaken outside Indian territorial waters, and the issue was covered by binding precedent already applied in the assessee's own earlier years.

Conclusion: The mobilisation and demobilisation receipts were includible in the gross receipts and the issue was decided against the assessee.

Issue (ii): Whether reimbursement of actual expenses incurred on behalf of the client was includible in the gross receipts under section 44BB of the Income-tax Act, 1961.

Analysis: Section 44BB was treated as a complete code providing for computation of deemed profits at the prescribed percentage of the aggregate amount specified in the provision. The expression used in the provision was held wide enough to include amounts received in connection with the relevant services and facilities, and reimbursement of actual expenditure was not excluded from the computation base. The issue was also covered by binding precedent followed in the assessee's own case.

Conclusion: The reimbursement amount was includible in the gross receipts and the issue was decided against the assessee.

Final Conclusion: The appeal failed on both grounds and the additions were sustained under the deemed-profit computation scheme of section 44BB.

Ratio Decidendi: For the purposes of section 44BB of the Income-tax Act, 1961, all amounts received or payable in connection with oil exploration services form part of the aggregate receipts for deemed-profit computation, and reimbursement of expenses or mobilisation-related receipts are not excluded merely because they relate to actual expenditure or foreign-voyage activity.

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