TaxTMI 
TaxTMI 
2024 (1) TMI 652
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....peals, common issue is raised by the assessee which relates to whether service tax forms part of the gross receipts of the assessee for the purpose of computing its total income on presumptive basis in terms of sec. 44BBA of the Act. Since the issue involved is common, we dispose of all these four appeals by this consolidated order by taking facts from the appeal for AY 2016-17 in ITA No. 420/Kol/2023 in the case of Cathay Pacific Airways Ltd. Observations and findings arrived at in this appeal shall apply mutatis mutandis to all the three other appeals before us. 4. Brief facts of the case as culled out from records are that assessee is a non-resident company engaged in the business of airlines service for passengers and cargo. Assessee filed its original return of income on 29.09.2016, reporting total income of Rs. 93,53,53,230/- computed on presumptive basis u/s. 44BBA of the Act. A revised return was furnished on 16.11.2017 reporting total income at Rs. 1,02,61,34,310/-. In the course of assessment proceedings, Ld. AO sought explanation in respect of gross receipts as disclosed in the revised return and the gross receipts disclosed in the service tax return for which necessar....
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....0 SOT 656 (Delhi Trib.); v) Orient Overseas Container Line Ltd. Vs. ADIT (2013) 60 SOT 196 (Mum. Trib.); vi) ACIT Vs. Transocean Offshore Deep Water Drilling Inc. (2009) 176 Taxman 122 (Delhi)(MAG); vii) Hanjin Shipping Company Ltd. Vs. DDIT (ITA No. 5277/Mum/2014 dated 13.05.2016)(Mum. Trib.); viii) Veolia Eau-Compagnie Generale Des Eaux Vs. Addl. DIT (2011-TII-105-ITAT-MAD- INTL), (Chennai Trib.) 6. It was also contended by the assessee that it is liable to pay tax on the income embedded in only those receipts which are at its disposal. In the present case, it is submitted that the service tax collected by it is not at the disposal of the assessee but is a liability which is to be discharged by way of depositing the same with the exchequer of the Government and, therefore, the service tax collection cannot be included in the gross receipts for computing the deemed taxable income u/s. 44BBA of the Act. 6.1. After considering the submissions made by the assessee, Ld. CIT(A) did not agree with the contentions raised by the assessee to hold that service tax forms part of the turnover as referred to in section 44BBA(1). He also noted that the Settlement Commission (Income Ta....
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....he provisions of section 44BBA which is before the Hon'ble Tribunal. 7.3. Ld. Counsel referred to para 7 of the decision of Hon'ble High Court of Uttarakhand in the case of B. J. Services (supra) where in judgment in the case of Full Bench of the Hon'ble Uttarakhand High Court in the case of Schlumberger Asia Services Ltd. (supra) was quoted which is reproduced as under: "28. As 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, it is only such amounts, paid or payable for the services provided by the assessee, which can form part of the gross receipts for the purposes of computation of gross income under section 44BB(1) read with section 44BB(2). DIT v. Mitchell Drilling International Pvt. Ltd. (2015) 62 taxmann.com 24/234 Taxman 818/(2016) 380 ITR 130 (Delhi). On its literal construction, section 44BB(2) would only be the amount paid by the ONGC to the assessee on account of (i) provision of services in connection with or (ii) s....
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....resent case before us, notably, assessee is a non-resident engaged in the business of operation of airlines and is subjected to income tax under the Act on presumptive basis in terms of section 44BBA of the Act. 9.1 Provisions of section 44BBA are reproduced as under: "Section-44BBA: Computing profits and gains of business of operation of aircraft in the case of non-residents. 44BBA. (1) Notwithstanding anything to the contrary contained in sections 28 to 43A, in the case of an assessee, being a non-resident, engaged in the business of operation of aircraft, a sum equal to five 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". (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 carriage of passengers, livestock, mail or goods from any place in India; and (b) the amount received or deemed to be received in India by or on behalf of the assessee on account of the c....
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....a) on which Ld. CIT(A) has based his finding and decision, we note that the substantial question framed on the issue was as under: "Whether the amount of service tax collected by the assessee from its various clients should have been included in gross receipt while computing its income under the provisions of section 44BB of the Act?" 9.3 While answering the above substantial question of law, Hon'ble High Court considered various decisions including the decision of Hon'ble Supreme Court in the case of Chowringhee Sales Bureau Pvt. Ltd. Vs. CIT (1973) 87 ITR 592 (SC), CIT Vs. Lakshmi Machine Works (2007) 290 ITR 667 (SC), DIT Vs. Schlumberger Asia Services Ltd. (2009) 317 ITR 156 (Uttarakhand) and Sedco Forex International Inc. Vs. CIT (2008) 299 ITR 238 (Uttarakhand). The Hon'ble High Court also referred to the Circular issued by CBDT vide Circular No. 4/2008 dated 28.04.2008 and Circular No. 1/2014 dated 13.01.2014 wherein CBDT clarified that service tax paid by the tenant does not partake the nature of 'income' of the landlord. The landlords only acts as a collecting agency for the Government for collection of service tax and, therefore, CBDT decided that tax deduction at sou....