GST inclusion in deemed shipping income under section 44B: Tribunal finds GST excluded and section 115JB inapplicable.

The text addresses whether GST receipts form part of gross receipts for computing deemed shipping income under the presumptive taxation scheme; the Tribunal concluded that GST is not includible for computation under section 44B, resulting in relief to the taxpayer. It also considers whether book-profit based minimum tax applies where income is offered under the deeming rule and treaty; in view of the explanatory provision excluding such cases from minimum tax computation, the minimum tax provisions are inapplicable. Finally, the revenue authority is directed to grant TDS and advance tax credits and to compute any interest on refunds after factual verification.

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Issues: (i) Whether GST receipts collected by the assessee are includible in gross receipts for computing deemed income under Section 44B of the Income-tax Act, 1961; (ii) Whether provisions of Section 115JB apply to the assessee in view of Explanation 4A to Section 115JB(1); (iii) Whether the assessee is entitled to credit of short TDS and short advance tax and interest under Section 244A; (iv) Whether initiation of penalty proceedings under Section 270A is maintainable at this stage.

Issue (i): Whether GST receipts collected by the assessee are includible in gross receipts for computing deemed income under Section 44B of the Income-tax Act, 1961.

Analysis: The issue concerned whether amounts collected as GST constitute 'amounts paid or payable' or 'amounts received or deemed to be received' under Section 44B(2). Coordinate-bench decisions in the assessee's own case on identical facts held that GST is a statutory levy collected as agent of the government and not a charge for carriage; Section 44B is a special deeming provision with a non-obstante clause, and Section 145A does not expand the specified amounts under Section 44B. The recurring nature of the issue and absence of change in law or facts were noted.

Conclusion: GST receipts are not includible in gross receipts for computing deemed income under Section 44B. This issue is decided in favour of the assessee.

Issue (ii): Whether provisions of Section 115JB apply to the assessee in view of Explanation 4A to Section 115JB(1).

Analysis: Coordinate-bench decisions on the same factual matrix concluded that where income is offered under the deeming provisions of Section 44B read with Section 90(2) and relevant tax treaty, Explanation 4A to Section 115JB(1) excludes such income from applicability of Section 115JB. No change in facts or law was shown to warrant a different conclusion.

Conclusion: Section 115JB does not apply to the assessee in view of Explanation 4A to Section 115JB(1). This issue is decided in favour of the assessee.

Issue (iii): Whether the assessee is entitled to credit of short TDS and short advance tax and interest under Section 244A.

Analysis: The appellate authority below (CIT(A)) had directed verification and grant of credited TDS and advance tax and computation of interest under Section 244A. The matter remains pending with the AO and a rectification application has been filed; therefore verification and compliance by the AO was directed.

Conclusion: The AO is directed to verify and grant the short TDS and short advance tax credits and compute interest under Section 244A as per law. Grounds on these points are allowed for statistical purposes in favour of the assessee.

Issue (iv): Whether initiation of penalty proceedings under Section 270A is maintainable at this stage.

Analysis: The penalty initiation was premature on the material before the Tribunal and no substantive adjudication on underreporting was warranted at this stage.

Conclusion: Penalty proceedings under Section 270A are dismissed. This issue is decided against the Revenue.

Final Conclusion: The appeal is partly allowed: substantive relief granted to the assessee on the inclusion of GST under Section 44B and applicability of Section 115JB, directions given to the assessing officer to give effect to credits and interest after verification, and penalty initiation dismissed; jurisdictional/time-bar issues were kept open and some consequential matters were left for compliance.

Ratio Decidendi: For computation under Section 44B, only the specified amounts in Section 44B(2) are to be included; statutory levies collected as agent (such as GST) are not part of those specified amounts and therefore are not includible in deemed income under Section 44B.

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