Tax Tribunal decision: Tax receipts under section 44BB for Singapore corporate entity

The Tribunal directed the tax authority to tax the receipts under section 44BB, not as royalty, for a non-resident corporate entity incorporated in Singapore. The Tribunal also instructed the assessee to provide documents for reconciliation of revenue amounts and granted directions for verifying and allowing TDS credit. The appeal was partly allowed, with the interest levy issues deemed consequential and dismissed as premature.

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Issues Involved:
1. Addition of Rs.23,85,90,034/- as royalty under section 9(1)(vi) read with section 115A of the Act.
2. Double counting of revenue.
3. Non-granting of credit of TDS amounting to Rs.57,12,356/-.
4. Levy of interest under section 234A and 234B.

Summary:

1. Addition of Rs.23,85,90,034/- as Royalty:
The assessee, a non-resident corporate entity incorporated in Singapore, did not file any return of income despite receiving payments from Larson & Toubro Ltd. and Polarcus DMCC. The Assessing Officer (AO) reopened the assessment under section 147 and treated the receipts as royalty/FTS, bringing them to tax under section 115A. The Dispute Resolution Panel (DRP) upheld this, stating the receipts were in the nature of royalty as per Explanation 2(iva) to section 9(1)(vi) and that section 44BB would not apply due to the absence of a Permanent Establishment (PE) in India. However, the Tribunal found that the receipts for hiring vessels for seismic support and transportation of coated pipes related to mineral oil exploration activities fall under section 44BB. The Tribunal noted that section 44BB does not require a PE in India and directed the AO to tax the receipts under section 44BB, not as royalty.

2. Double Counting of Revenue:
The assessee claimed that the AO had doubled the revenue amount, taking Rs.23,85,90,034/- instead of Rs.11,92,95,017/- as per Form 26AS. The DRP acknowledged a prima facie case of double counting but directed the assessee to provide complete bank statements and reconciliation sheets. The AO reiterated the higher amount due to the alleged non-provision of documents by the assessee. The Tribunal directed the assessee to furnish the requisite documents to the AO for reconciliation and correction of any double addition.

3. Non-granting of Credit of TDS:
The assessee raised the issue of not being granted TDS credit amounting to Rs.57,12,356/-. The Tribunal directed the AO to verify the claim and allow the credit of TDS in accordance with the law.

4. Levy of Interest under Section 234A and 234B:
This issue was deemed consequential and did not require adjudication. Ground no. 7 was dismissed as premature.

Conclusion:
The appeal was partly allowed, with directions for the AO to re-assess the taxability under section 44BB, verify the double counting of revenue, and grant TDS credit after verification. The interest levy issues were deemed consequential.

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