Presumptive shipping income excludes GST from section 44B receipts and leaves foreign shipping profits outside section 115JB.

GST collected by a non-resident shipping company is not includible in the gross receipts for presumptive computation under section 44B, because that provision covers only amounts paid or payable, or received or deemed received, on account of carriage and similar specified charges; a general valuation rule cannot expand that base. The analysis follows the same principle applied to similar indirect taxes and treats GST as a statutory levy collected for remittance, not business revenue. Foreign shipping income offered under the treaty-based presumptive regime is also outside section 115JB, so book profit computation is not attracted on those facts.

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Issues: (i) Whether GST collected by a non-resident shipping company is includible in the aggregate amounts for computing deemed income under section 44B; (ii) Whether book profit under section 115JB could be computed in the case of income offered under section 44B read with the treaty.

Issue (i): Whether GST collected by a non-resident shipping company is includible in the aggregate amounts for computing deemed income under section 44B.

Analysis: Section 44B is a special presumptive provision for non-resident shipping business and deems income at 7.5% of specified amounts received or receivable on account of carriage of passengers or goods. The expression used in section 44B(2) is confined to amounts paid or payable, or received or deemed to be received, on account of carriage and includes only demurrage, handling charges, or similar amounts. GST is a statutory levy collected and remitted to the Government and does not represent a charge for carriage or a revenue element of the shipping business. The special computation mechanism in section 44B was held to operate independently of section 145A, which is a general valuation provision for business income and cannot enlarge the scope of the specific amounts covered by section 44B. The earlier line of authority excluding service tax from similar presumptive computations was treated as equally applicable to GST.

Conclusion: GST is not includible in the gross receipts for computation of deemed income under section 44B, and the issue is decided in favour of the assessee.

Issue (ii): Whether book profit under section 115JB could be computed in the case of income offered under section 44B read with the treaty.

Analysis: The assessee had offered income from operation of ships under the presumptive regime and treaty framework. In that situation, the Explanation excluding such foreign shipping income from the scope of section 115JB applied, so the normal book profit mechanism could not be invoked against the assessee for this income.

Conclusion: Section 115JB was held inapplicable on the facts, and the issue is decided in favour of the assessee.

Final Conclusion: The assessment was interfered with on the substantive tax issues and the GST addition under the shipping presumptive regime was deleted, while the separate credit-related issue was left for examination by the Assessing Officer.

Ratio Decidendi: For a non-resident shipping business, only the amounts specifically covered by section 44B(2) can enter the presumptive base, and a general accounting valuation provision cannot be used to add a statutory tax collection such as GST to that base.

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