TaxTMI 
TaxTMI 
2017 (9) TMI 1283
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....ment year 2010-11. The grounds raised by the Revenue in the grounds of appeal are as under:- 1. Whether on the facts and in the circumstances of the case and in law, the Ld CIT (Appeals) has erred in holding that receipts on account of service tax are not includible in gross revenue of the assessee for the purpose of computation of profits under the presumptive provisions of u/s 44BB of the Income Tax Act, 1961 ("the Act"). 2 1.1 Whether the Ld CIT (Appeals) has erred in not appreciating the fact that the provisions of section 44BB of the Act are a self-contained code providing for computation of profit at a fixed percentage of gross receipts of the assessee and all the deductions and exclusions from income are deemed to h....
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....lhi High Court in the case of 3 DIT vs. Mitchell Drilling International Pvt. Ltd. (2016) 380 ITR 130 (Del.). 3. On the other hand, the ld. D.R. strongly relied upon the order of the Assessing Officer. 4. The brief facts are that the assessee is a non-resident company having its P.E in India, through which it is carrying on its business in India. Accordingly it has been showing its income under section 44BB of the Act, as it is not in dispute that the assessee is to be assessed under the Indian Income Tax Act. In the return of income, the assessee had shown its income under section 44BB(1) which was at 10% of gross revenue amounting to Rs. 53,14,52,047/-. The Assessing Officer, from the perusal of the payment receipts and revenue break....
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....;ble Delhi High Court in the case of DIT vs. Mitchell Drilling International Pvt. Ltd.(supra) wherein the Hon'ble High Court, after analyzing various judgments of Hon'ble Uttarakhand High Court and the judgment in the case of Chowringhee Sales Bureau Pvt. Ltd. vs. CIT (1973) 87 ITR 542, observed and held as under:- "9. Section 44BB begins with a non obstante clause that excludes the application of Sections 28 to 41 and Sections 43 and 43A to assessments under Section 44 BB. It introduces the concept of presumptive income and states that 10% credit of the amounts paid or payable or deemed to be received by the Assessee on account of "the provision of services and facilities in connection with, or supply of plant and machiner....
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.... on the facts and in the circumstances of the case the sum of Rs. 32,986 had been validly excluded from the assessee's business income for the relevant assessment year?". However, there the Assessee did not deposit the amount collected by it as sales tax in the State exchequer since it took the stand that the statutory provision creating that liability upon it was not valid. In the circumstances, the Supreme Court held that the sales tax collected, and not deposited with the treasury, would form part of the Assessee's trading receipt. 13. The decision in George Oakes (P) Ltd. (supra) was concerned with the constitutional validity of the Madras General Sales (Definition of Turnover and Validation of Assessments) Act, 1954 on....
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....h was the denominator in the formula contained in Section 80 HHC (3) as it stood in the material time?" The Supreme Court considered its earlier decision in Chowringhee Sales Bureau (supra) and answered the question in the negative. The Supreme Court noted that for the purposes of computing the 'total turnover' for the purpose of Section 80 HHC (3) brokerage, commission, interest etc. did not form part of the business profits because they did not involve any element of export turnover. It was observed: "just as commission received by an assessee is relatable to exports and yet it cannot form part of 'turnover', excise duty and sales-tax also cannot form part of the 7 'turnover'." The object of the legislature in enac....
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....oses of computing the 'presumptive income' of the assessee for the purposes of Section 44 BB of the Act, the service tax collected by the Assessee on the amount paid is for rendering services is not to be included in the gross receipts in terms of Section 44 BB (2) read with Section 44 BB (1). The service tax is not an amount paid or payable, or received or deemed to be received by the Assessee for the services rendered by it. The Assessee is only collecting the service tax for passing it on to the government. 8 18. The Court further notes that the position has been made explicit by the CBDT itself in two of its circulars. In Circular No. 4/2008 dated 28th April 2008 it was clarified that "Service tax paid by the tenant doe....