2017 (1) TMI 512 - HC - Income Tax

Court condones delay in filing appeals due to late original filing. Reimbursement included in taxable income under Section 44BB.

M/s Ensco Maritime Ltd. Versus Additional Director of Income Tax

The court condoned the delay in filing Income Tax Appeals due to original appeals being filed late and subsequently refiled. Regarding the inclusion of ... Taxation under Section 44BB - calculation of amount - whether reimbursement of actual expenses were not to be included within the amount which is to be reckoned for the purpose of taxation under Section 44BB - Held that:- The question has engaged the attention of this Court in an earlier judgment in the case of Commissioner of Income Tax vs. Halliburton Offshore Services Inc., reported in (2007 (9) TMI 230 - UTTARAKHAND HIGH COURT). We also think that Section 44BB is a complete code in itself and the amount received, be it by way of reimbursement, is not, in any way, excluded from the ambit of Section 44BB. Therefore, placing reliance on Section 2(45) or Section 5(2) cannot advance the case of the appellant. Appeals are meritless and the questions of law are answered against the appellant Issues: Delay in filing Income Tax Appeals, Inclusion of reimbursement of actual expenses in taxable income under Section 44BB of the Income Tax Act.Analysis:1. Delay in filing Income Tax Appeals:The judgment addresses the delay of 715 days in filing Income Tax Appeal Nos. 50 of 2015 and 52 of 2015, and 323 days in filing Income Tax appeal No. 51 of 2015. The appellant explained that the delay was due to the original appeals being filed late, withdrawn with liberty to file fresh appeals, and subsequently refiled with the delay. The court, after hearing both parties, decided to condone the delay, allowing the Applications for condonation of delay.2. Inclusion of Reimbursement of Actual Expenses in Taxable Income under Section 44BB:The appeals in question arose from orders by the Tribunal not agreeing with the appellant's contention regarding the treatment of amounts received as reimbursement of actual expenses under Section 44BB of the Income Tax Act. The appellant argued that such reimbursements should not be included in taxable income as they do not qualify as income under Section 2(45) or fall under the charging provision of Section 5(2). However, the court, referring to a previous judgment, held that Section 44BB is a comprehensive provision and does not exclude amounts received as reimbursement. It concluded that reliance on Section 2(45) or Section 5(2) cannot support the appellant's case. Therefore, the court found the appeals meritless and ruled against the appellant, dismissing the appeals without any costs.