TaxTMI 
TaxTMI 
2018 (2) TMI 53
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....at the Ld.CIT(A) has erred on facts and in law in affirming the action of the A.O in holding that the receipts on account of reimbursements of expenses incurred on provision of fuel, amounting to INR 692,665,431/- were includible in the gross receipts for the purpose of determination of income under section 44BB of the Act. Ground No. 3 That the Ld.CIT(A) has erred on facts and in law in affirming the action of the A.O in holding that the receipts on account of reimbursements of service tax, amounting to INR 486,455,033/- were includible in the gross receipts for the purpose of determination of income under section 44BB of the Act. Ground No. 4 That the Ld.CIT(A) has erred on facts and in law in affirming the action of the A.O in holding that the receipts on account of reimbursements of interest on service tax, amounting to INR 7,254,268/- were includible in the gross receipts for the purpose of determination of income under section 44BB of the Act. Your appellant prays that the erroneous order be cancelled and appropriate relief may be granted to the appellant. Your appellant craves leave to add to, alter, amend, vary, omit, su....
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....ted that the same is in favour of the assessee in case of DIT Vs. Mitchell Drilling International Pvt. Ltd. 380 ITR 130 wherein the Jurisdictional Delhi High Court decided the issue in favour of the assessee. 6. The Ld. DR relied upon the order of the Assessing Officer and CIT(A) as well as the Jurisdictional High Court decision which is in favour of Revenue. 7. We have heard both the parties and perused the material available on record. As relates to ground No. 1 and 2, he issue is squarely covered by the Jurisdictional High Court in case of Halliburton Offshore Services against the assessee. The Hon'ble Uttarakhand High Court in the case of CIT vs. Halliburton Offshore Services Ltd has held as under: "S.44BB of the Income Tax Act, 1961 is a complete code in itself. It provides by a legal fiction the profits and gains of a non-resident assessee engaged in the business of oil exploration at 10 per cent of the aggregate amount specified in sub section (2) Clause(a) of subsection(2) refers to the amounts, (a) paid to the assessee (whether in or out of India) on account of the provision of services and facilities in connection with, or supply of plant and machinery ....
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....es in connection with, or supply of plant and machinery on hire used, or to be used, in the prospecting for, or extraction or production of, mineral oils in India" shall be deemed to be the profits and gains of the chargeable to tax. The purpose of this provision is to tax what can be ultimately considered as income of the Assessee earned. From its business and profession.. 10. The expression 'amount paid or payable' in Section 44BB (2) (a) and the expression 'amount received or deemed to be received' in Section 44BB(2)(b) is qualified by the words 'on account of the provision of services and facilities in connection with, or supply of plant and machinery.' Therefore, only such amounts which are paid or payable for the sendees provided by the Assesses can form part of the gross receipts for the purposes of computation of the gross income under Section 44 BB (1) read with Section 44BB(2). 11. It is in this context that the question arises whether the service tax collected by the Assesses and passed on to the Government from the person to whom it has provided the services can legitimately be considered to form part of the gross receipts for the purposes ....
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....9;turnover' was also in another specific context. There the question before the Supreme Court was "whether excise duty and sales tax were includible in the 'total turnover' which was the denominator in the formula contained in Section 80 BBC (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 BBC (3) brokerage, commission, lid 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 taxable to exports and yet it cannot form part of the turnover' excise duty and sales-tax also cannot form part of the 'turnover'." The object of the legislature in enacting Section 80 HHC of the Act was to confer a benefit on profits accruing with reference to export turnover. Therefore, "turnover" was the requirement. "Commission, rent, interest etc. did not involve any turnover." It was concluded that 'sales tax and excise duty1 like the afor....