TaxTMI 
TaxTMI 
2019 (5) TMI 424
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....Act'). Ground No. 2 That the Ld.CIT(A) has erred on facts and in law in affirming the action of the AO in holding that the income on account of towing Jet Drilling (S) Pte Limited's rig - Energy Driller, from Kakinada to Singapore was taxable as royalty payments as opposed to the claim of the appellant that the receipts are explicitly qualified for 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, substitute or delete any of the aforementioned grounds of appeal or add a new ground or grounds of appeal at any time before or at the time of hearing of the appeal." 3. Firstly we are taking up appeal for A.Y. 2012-13. A draft Assessment Order under Section 143(3)/144C(1) of the Income Tax Act, 1961 for A.Y. 2012- 13 was passed on 05.03.2015 at a total income of Rs. 4,78,04,550/- as against income of Rs. 1,85,81,544/- shown in the revised return of income. The assessee did not file objections against the draft order before the Dispute Resolution Panel. The Assessment ....
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....e India. Clause (b) deals with amount received or deemed to be received in India in connection with such services and facilities as stipulated therein. Thus, whereas clause (a) mentions the amount which is paid or payable, clause (b) deals with the amounts which are received or deemed to be received in India. In respect of amount paid or payable under clause (a) of sub-section (2), it is immaterial whether these are paid in India or outside India. On the other hand, amount received or deemed to be received have to be in India. 48) From the bare reading of the clauses, amount paid under the aforesaid contracts as mobilisation fee on account of provision of services and facilities in connection with the extraction etc. of mineral oil in India and against the supply of plant and machinery on hire used for such extraction, clause (a) stands attracted. Thus, this provision contained in Section 44BB has to be read in conjunction with Sections 5and 9 of the Act and Sections 5 and 9 of the Act cannot be read in isolation. The aforesaid amount paid to the assessees as mobilisation fee is treated as profits and gains of business and, therefore, it would be "income" as per Section 5.....
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....fact, it is a fixed amount paid which may be less or more than the expenses incurred. Incurring of expenses, therefore, would be immaterial. It is also to be borne in mind that the contract in question was indivisible. Having regard to these facts in the present case as per which the case of the assessees get covered under the aforesaid provisions, we do not find any merit in any of the contentions raised by the assessees. Therefore, the ultimate conclusion drawn by the AO, which is upheld by all other Authorities is correct, though some of the observations of the High Court may not be entirely correct which have been straightened by us in the above discussion. For our aforesaid reasons, we uphold the conclusion. Resultantly, all the appeals of the assessees are dismissed. During the year the assessee was engaged in the business of providing offshore supply vessel in respect of all the contracts mentioned in the Assessment Order. In the present case also the amount which is paid to the assessee is towards the expenses incurred on behalf of the payer and no where mentions that it is for reimbursement of expenses. The assessee also relied upon the decision of the Hon'ble Delhi Hig....
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....ue taxable u/s 44BB of the Act. Ground No. 2 That the Ld.CIT(A) has erred on facts and in law in affirming the action of the AO in holding that the receipts on account of reimbursements of expenses aggregating to INR 6,482,115 are 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, substitute or delete any of the aforementioned grounds of appeal or add a new ground or grounds of appeal at any time before or at the time of hearing of the appeal." 12. The Draft Assessment Order under Section 143(3)/144C(1) of the Act for the Assessment Year 2013-14 was passed on 18.01.2016 at a total income of Rs. 2,43,34,390/- as against income of Rs. 1,72,99,395/- shown in the revised return of income. The assessee did not file objections against the draft order before the Dispute Resolution Panel (DRP). The Assessment order was passed under Section 143(3)/144C(3)(b) of the Act on 02.03.2016 thereby making addition on account of ....