2009 (5) TMI 25

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....as ITAT), whereby Income Tax Appeal No. 4758 / Del / 2005 (Assessment Year 2003-04), filed by the revenue, is dismissed. 2. The question of law involved in this appeal, is as under: Whether, the ITAT has erred in law in holding that reimbursement of expenses on account of catering charges and fuel etc. to the assessee were not part of the gross receipts for the purposes of Section 44BB of the Income Tax Act, 1961? 3. Heard learned counsel for the parties. 4. Brief facts giving rise to this appeal are that assessee, a non-resident company, is incorporated in U.S.A. For the Assessment Year 2003-04, the assessee filed its return of income on 28.11.2003, showing total income at Rs. 6,17,89,710/-. Said return was processed under Section....

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...., a sum equal to ten per cent of the aggregate of the amounts specified in sub-section (2) shall be deemed to be the profits and gains of such business chargeable to tax under the head "Profits and gains of business or profession": Provided that this sub-section shall apply in a case where the provisions of section 42 or section 44D or section 115A or section 293A apply for the purposes of computing profits or gains or any other income referred to in those sections. (2) the amounts referred to in sub-section (1) shall be the following, namely :- (a) the amount paid or payable (whether in or out of India) to the assessee or to any person on his behalf on account of the provision of services and facilities in connection with, or supply ....

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....on (1) provides that in respect of such assessees notwithstanding anything contained in Section 28 to 41 and Section 43 to 43A of the Act, an assessee shall be deemed to have earned ten per cent profits on the amount mentioned in sub-section (2), received by him. The amount mentioned in sub-section (2), as quoted above, clearly shows that the amount paid to the assessee on account of provision of services and facilities in connection with the extraction or production of mineral oils, whether paid in or outside India, are to be included. The words used in the section, in our opinion, include the amount received by the assessee on account of catering charges and fuel etc. to the non-resident assessee involved in the business of oil exploratio....