Service tax collected on behalf of Government is excluded from gross receipts for presumptive income under section 44B.

Service tax collected by a shipping company and remitted to the Government was held not to form part of gross receipts for presumptive computation under section 44B of the Income-tax Act. The Tribunal treated the levy as a statutory collection made on behalf of the Government, with no trading character and no profit element in the assessee's hands. It followed its earlier decisions in the same assessee's cases and noted that no contrary binding ruling had displaced that consistent view. The amount was therefore excluded from the gross receipts base for presumptive income.

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Issues: Whether service tax collected by a shipping company and remitted to the Government is to be included in the gross receipts for computing presumptive income under section 44B of the Income-tax Act, 1961.

Analysis: The dispute was confined to the character of service tax collected from customers and paid over to the Government. The Tribunal followed its earlier decisions in the assessee's own cases and reiterated that the amount did not represent trading receipts of the assessee, carried no profit element, and was collected only as a statutory levy on behalf of the Government. The Tribunal also noted that the consistent view taken in the assessee's earlier years had not been displaced by any contrary binding decision.

Conclusion: Service tax collected and remitted to the Government is not includible in the gross receipts for computation of presumptive income under section 44B; the issue was decided in favour of the assessee.

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