TaxTMI 
TaxTMI 
2018 (10) TMI 1503
X X X X Extracts X X X X
X X X X Extracts X X X X
....e assessee company is incorporated under the laws of Cayman Islands and the services being provided entail providing offshore drilling units and other equipment along with personnel to operate such equipment and other allied services in relation to the drilling operations. the return of income was filed by the assessee under the provisions of section 44BB(1) of the Act, declaring total income of Rs. 125,22,46,882/-. After initial processing of return u/s 143(1) of the Act, the case was picked up for scrutiny. During the course of assessment proceedings, the Assessing Officer noticed that the assessee had entered into an international transactions with Associated Enterprises (AE) during the year and, accordingly, the case was referred to the....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... were purely in the nature of reimbursements and not on account of any service rendered, the same were not taxable. Similarly, with respect to mobilization receipts, it was submitted that only proportionate revenues relatable to activities in India were included and those relatable to activities outside India were excluded. However, the Assessing Officer, after considering the submission of the assessee, proceeded to include all above four amounts in the total taxable gross receipts and thereby computed the gross receipts at Rs. 136,81,02,102/- . Apart from this, the Assessing Officer also added the gross receipt from TDSIPL amounting to Rs. 15,94,96,140/- to the income of the assessee without giving the benefit of provision of section 44BB....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ng grounds of appeal:- "Ground No. 1 On the facts and circumstances of the case, the Ld. AO/DRP has erred on facts and in law in holding that the sum of INR. 208,127,148/- received by the appellant towards fee for mobilization/demobilization of the rig outside India, is to be included in the gross receipts u/s 44BB of the Act without appreciating that the said amount does not accrue or arise to the appellant in India in terms of s.5(2) read with s.9 of the Act. Ground No. 2 On the facts and circumstances of the case, the Ld. AO/DRP has erred on facts and in law in holding that the amounts aggregating to INR. 476,513,071/-, received by the appellant from its customers as reimbursement of actual expenses(ma....
X X X X Extracts X X X X
X X X X Extracts X X X X
....al Drilling Ltd.(supra) are as under:- "Held, dismissing the appeal, that the payment made to the assessee was outside India and the mobilization charges paid to the assessee by ONGC had no nexus with the actual amount incurred by the assessee for transportation of drilling units of rigs to the specified drilling locations in India. Thus, the mobilization charges were not reimbursement of expenditure. ONGC was liable to pay a fixed sum as stipulated in the contract regardless of the actual expenditure which might be incurred by the assessee for the purpose. In view of the fictional taxing provision contained u/s 44BB, the Assessing Officer was right in adding the amount of Rs. 99,04,000/- for the assessment year 1986-87 and the amo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....egate amount specified in sub sec. (2). Clause (a) of sub section (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 & machinery on hire used or to be used in the prospecting for, or extraction or production of, mineral oils in India and (b) payable 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 on hire used, or to be used in the prospecting for, or extraction or production of, minerals oils in India. Clause (b) of sub section (2) refers to the amounts (a) received by assessee in India on account of the provision o....