TaxTMI 
TaxTMI 
2015 (2) TMI 106
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.... beneficial provision in itself, it does not envisage any further concessions to the assessee." 3. Briefly stated, the facts giving rise to this appeal are that the assessee company has been incorporated in Australia and is engaged in the business of providing equipment on hiring and manpower etc. for exploration and production of mineral oil and natural gas. During the year under appeal, the assessee earned gross receipt of Rs. 21,05,89,855 from various clients and offered a total income of Rs. 2,12,90,261 in its return of income in terms of provisions contained in section 44BB of the Income Tax Act, 1961. The AO held that the assessee is eligible to be assessed under the said section in so far as the receipts from M/s Arrow Energy, M/s Essar Oil Limited, M/s Reliance Industries Limited, M/s Great Eastern Energy Pty. Limited are concerned. The AO held that an amount of Rs. 2,57.20,779 /- collected as service tax by the assessee from its customer is to be added to its gross receipts to be taxed u/s 44BB of the Act and hence, the AO assessed the taxable income of the assessee at Rs. 2,38,62,338/-. 4. The aggrieved assessee preferred an appeal before the CIT(A) which was allowe....
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....sion dated 20.4.2011 in I.T.A.no.8845/Mum/2010 in the case of Islamic Republic of Iran Shipping Lines Vs. DCIT,2011-TOII-77- MUM-INTL, held that service tax being a statutory liability, would not involve any element of profit and a service provider having collected the amount on behalf of the Government, accordingly, the same could not be included in the total receipts for determining the presumptive income, the ld. AR added. On the other hand, the ld. DR supported the findings of the AO. 5. We have heard both the parties and gone through the facts of the case as alsothe aforesaid decisions relied upon by the ld. AR. We find that Hon'ble jurisdictional High Court in their aforesaid decision Halliburton Offshore Services Inc. (supra) while adjudicating an identical issue relating to reimbursement of freight & transport charges in respect of equipment, concluded as under:- "5. Sec. 44BB provides that the deemed profits and gains under subs.(1) shall be @ 10 per cent of the aggregate amount specified in sub-s.(2). We proceed to analyze sub-s. (2). Clause (a) of sub-s. (2) refers to the amounts, (A) paid to the assessee (whether in or out of India) on account of the provision of ....
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....d imposed the income-tax thereon. 5.1 In the light of view taken by the Hon'ble jurisdictional High Court in their aforesaid decision, especially when the ld. AR accepted the position that the issue is squarely covered by the aforesaid decision while no other contrary decision was brought to our notice nor the ld. AR placed any material before us, controverting the aforesaid findings of the DRP and the AO, we have no hesitation in upholding the findings of the AO in the light of directions of the DRP in para 3.2 of their order dated 2nd September, 2011 in respect of reimbursement of amount on account of fuel recharge. In view thereof, ground no. 2 in the appeal is dismissed. 6. As regards reimbursement of amount in respect of service tax, as pointed out by the ld. AR, the ITAT Delhi Bench in their decision in Technip Offshore Contracting BV(supra) concluded that service tax collected by the assessee being directly in connection with services or facilities or supply specified u/s 44BB of the Act provided by the assessee to ONGC, have to be included in the total receipts for the purpose of determination of presumptive profit u/s 44BB of the Act. It is well established that sect....
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....take a different view in the matter nor brought to our notice any contrary decision, we are of the opinion that service tax paid by the assessee could not form part of amount for the purpose of deemed profits u/s 44BB unlike the other amounts received towards reimbursement............." 9. Since this issue is covered by earlier decision of ITAT, 'G' Bench, Delhi, which is on similar point and no contrary or any higher courts' precedent has been cited, therefore, while following the said decision, we uphold the order of Ld.CIT(A) and dismiss the present appeal." 7. From operative part of the impugned order of the CIT(A) for AY 2009- 10, we observe that the CIT(A) has granted relief for the assessee with following determination:- "Determination: 4.0 The appellant has submitted that service tax collected by the appellant on and for behalf of central government by itself can not be said to have been received in return of providing any services or facilities in terms of section 44BB of the Act. The appellant has further contended that similar issue was involved in AY 2008-09 and then CIT(A) has decided the issue in favour of the appellant. The said order of CIT(A) has since ....