TaxTMI 
TaxTMI 
2021 (11) TMI 996
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....are disposed of by this common order. 2. The assessee has raised the following grounds of appeal for Assessment Year 2011-12:- "Ground No. 1 On the facts and circumstances of the case, the Ld. CIT(A) has erred in holding that the remission of income tax liability borne on behalf of the employees is to be added to the income under the head "Income from business or profession" u/s 41(l)(a) without appreciating that the assessee had computed its income in terms of Section 44BB of the Income Tax Act, 1961. In doing so, the Ld. AO/CIT(A) failed to appreciate that: 1.1. Section 44BB of the Act starts with a non-obstante clause by virtue of which section 28 to section 41 of the Act are not applicable to the assessee. 1.2. The Ld. AO did not make any reference/proposal to tax the remission of income tax liability in the Draft Assessment Order. GROUND NO. 2 On the facts and circumstances of the case, the Ld. AO/CIT(A) has erred in holding that the income received by the assessee, amounting to Rs. ^4,455,967/-, on account of interest on income-tax refund from the Deputy Director of Income-tax, International Taxation is taxable....
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....) of the India United Kingdom Double Taxation Avoidance Agreement the interest income of the UK resident is taxable in India at the rate of 15% of the gross amount of the interest. Thus assessee order of the learned assessing officer preferred appeal before the learned CIT - A. The learned CIT - A passed order on 29th of June 2016 wherein he confirmed the action of the learned assessing officer with respect to the chargeability of tax on remission of income tax liability holding that Section of income tax liability incurred on behalf of employees need to be brought to tax separately over and above and distinct from the amounts taxable u/s 44 BB of the income tax act. He further held that assessee has not filed revised return restating the income. He therefore held that the learned assessing officer has not committed any error while accepting this position. He also rejected the argument of the assessee that the learned assessing officer has not mentioned of the above adjustment in draft assessment order. The learned CIT appeal held that on reading of the assessment order it would bring out that the amount was considered as part of the proposed taxable income. Thus, he confirmed the ....
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....ll into provisions of subsection 2 of Section 44 BB of the act. Therefore, the remission income is required to be brought to tax separately. Section 44 BB of the act presumed income of the assessee at a sum equal to 10% of the aggregate of the amount specified in subsection (2) of the act. The amount so specified Under that subsection are sums paid or payable whether in or out of India to assessee or any other person for provision of services and facilities in connection with or supply of plant and machinery on higher used or to be used in the prospecting for extraction of production of mineral oils in India or services and facilities in connection with or supply of plant and machinery for the above activity. Admittedly, remission of income tax liability of employees is not covered under the receipts/amounts mentioned in subsection (2) of Section 44 BB of the act. Admittedly, the remission of income tax liability of employees does not relate to the income tax liability of such employees for assessment year 2011 - 12 but obviously for earlier years. Therefore if for the earlier year, the assessee has offered its income u/s 44 BB of the act and the income tax liability bond by the as....
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....ncome tax refund amounting to Rs. 4,455,967 as business income and taxable at maximum marginal rate of tax by the AO and upheld by the learned CIT - A. We do not find any reason to deviate from the orders of the lower authorities wherein the decision of the honourable jurisdictional High Court in ITA number 1 of 2010 in BJ Services Company Middle East limited versus Asst Commissioner of income tax is followed and the assessee has a permanent establishment in India is not denied. In the result ground number 2 of the appeal of the assessee is dismissed. 8. In the result appeal of the assessee for assessment year 2011 - 12 in ITA number 5219/Del/2016 is partly allowed. 9. Now we come to appeal of the assessee for assessment year 2013 - 14 wherein following grounds of appeal have been raised. 10. The assessee has raised the following grounds of appeal for Assessment Year 2013-14:- "GROUND NO. 1 On the facts and circumstances of the case the Ld. CIT(A) erred in holding that the assessee had a PE in India under Article 5 of the Indo-UK DTAA. GROUND NO. 2 On the facts and circumstances of the case, the Ld. AO/CIT(A) has erred in holding t....
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....income tax refund received u/s 244A of the income tax act is not chargeable to tax in India. He relied on the decision of the honourable jurisdictional High Court in case of BJ services company Middle East limited versus Asst Commissioner of income Tax and held that the decision applies to the assessee squarely. Thus, he charged the interest on income tax refund received of Rs. 198,44,274/- to tax at the rate of 40%. 13. The learned CIT - A held that it is not denied that the assessee had a project office in India. That project office constituted a permanent establishment of the appellant in India. He further found that such project office established to execute contract relating to projects in India and activities relating to such projects. He further considered the provisions of article 5 (2) of The Double Taxation Avoidance Agreement and held that the 'project office' also constitute a permanent establishment. He further referred to the decision of the coordinate bench in Micoperi SPA Milano [82 ITD 369] wherein it has been held that the 'project office' constitutes a permanent establishment. He further held that the assessee had the project office in the previous years also ....
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....dian waters on 2 June 2010. It received a port clearance, rivers, and certificate on 5 June 2010. On completion of the contract with Brazil Company, RILL indicated its interest to bring the contract to an early termination and agreed to pay compensation to the assessee for early termination of the contract, which was entered into on 28th of November 2011. Thus, the permanent establishment of the assessee seized to exist in India from the date on which the drilling rig moved out of India i.e. 5 June 2010. Therefore, there is no activity carried on by the assessee during the financial year 2012 - 2013 in India. Even the assessment order also does not have any income of the assessee chargeable to tax in India except interest on income tax refund received by the assessee. However, orders of lower authorities show that assessee has a project office in India. This was also not denied by the assessee as it is evident from paragraph number 5.5 of the order of the learned CIT - A. Now the question arises that whether the project office in itself can be said to be a permanent establishment of assessee in India through which the business of the assessee is being carried on. It is for the lear....