2007 (10) TMI 175

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....ellate Tribunal has modified the order passed by the Assessing Officer and affirmed by the Commissioner of Income-tax (Appeals) on two issues, firstly, that the amount worth Rs.5,88,30,840 was taken to be the basis for determining the deemed profits and gains under sub-section (1) of section 44BB of the Act at 1 per cent. in view of the Circular No. 1767 issued by the Central Board of Direct Taxes as this amount was received by the assessee as mobilization charges for mobilizing the vessel with a well equipped rig to Enron Oil and Gas (India) Ltd., an Indian company. Therefore, the mobilization charges were for the activities carried on outside India. 2. Secondly, the interest levied by the Assessing Officer under section 234B of the Act....

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....9,65,910   Interest income on IT. refunds   20,39,499 4.  The assessee filed an appeal before the Commissioner of Income-tax (Appeals), which was dismissed and the order of the Assessing Officer was affirmed. 5.  Feeling aggrieved by the aforesaid order of the Commissioner of Income-tax (Appeals), the assessee preferred a second appeal before the Income-tax Appellate Tribunal and the Income-tax Appellate Tribunal allowed the appeal of the assessee in the terms stated above. 6.  In the aforesaid facts and circumstances, the following questions arise for consideration by this court "(i) Whether the Income-tax Appellate Tribunal was legally justified in law and on facts in holding that mobilizat....

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....r to mobilization charges. 9. A perusal of the circular shows that the Central Board of Direct Taxes had provided that 1 per cent. of the receipt by the foreign company on purchase of equipments by way of platform, rig or any other facility fabricated outside India shall be applied to determine the deemed profits and gains under section 44BB of the Act. 10. The Central Board of Direct Taxes is competent to issue the circulars under section 119 of the Act in the form of guidelines or principles or procedures to be followed by the income-tax authorities relating to assessment or calculation of revenue. The Central Board of Direct Taxes exercises the delegated power which has been described under section 119 of the Act. The Central Board....