Presumptive income under section 44BB excludes service tax receipts and limits section 234B interest exposure.

Receipts from offshore supply and objections on royalty and fees for technical services were directed to be recomputed under the presumptive regime in line with the Tribunal's earlier view, without final quantification in the present year. Service tax collections were treated as statutory levies with no profit element and were held outside gross receipts for computing deemed income under section 44BB. Interest under section 234B was dealt with on a partial basis, remaining chargeable only to the extent earlier indicated and not sustained in full; the cross-objection was rejected as infructuous.

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Issues: (i) whether receipts from offshore supply and the Revenue's royalty and fees for technical services objections required fresh computation under the presumptive regime; (ii) whether service tax receipts formed part of gross receipts for computing income under section 44BB; (iii) whether interest under section 234B was leviable in full.

Issue (i): whether receipts from offshore supply and the Revenue's royalty and fees for technical services objections required fresh computation under the presumptive regime.

Analysis: The appeals on this question were treated as covered by the Tribunal's earlier decision in the assessee's own case for the preceding assessment years. The matter was not finally quantified in the present year, and the assessment was directed to be recomputed in the light of the earlier findings, including attribution of income to the extent of operations relating to sales carried out in India.

Conclusion: The issue was sent back to the Assessing Officer for recomputation in accordance with the earlier Tribunal ruling, with no final determination of the quantified income in this order.

Issue (ii): whether service tax receipts formed part of gross receipts for computing income under section 44BB.

Analysis: Service tax was treated as a statutory levy and not as an amount carrying any profit element. Following the earlier Tribunal view and the jurisdictional High Court decision, such statutory tax collections were held to lie outside the receipts on which deemed income under section 44BB is computed.

Conclusion: Service tax receipts were held not includible in gross receipts for section 44BB purposes, in favour of the assessee.

Issue (iii): whether interest under section 234B was leviable in full.

Analysis: The Tribunal followed its earlier order in the assessee's own case, which held the levy to be compensatory and not chargeable for certain contracts, while sustaining it for contracts where income had arisen in India. The matter therefore required recomputation consistent with that earlier partial allowance.

Conclusion: Interest under section 234B was held to be chargeable only to the limited extent earlier indicated, and the levy was otherwise not sustained in full.

Final Conclusion: The appeals were not fully accepted or rejected on the merits and were disposed of with a partial remand for recomputation, while the cross-objection was rejected as infructuous.

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