TaxTMI 
TaxTMI 
2022 (2) TMI 1423
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.... "(i) Whether on the facts and in the circumstances of the case and in law, the CIT (A) has erred in holding that receipts on account of VAT & Service tax are not includible in gross revenue of the assessee for the purpose of computation of profits under the presumptive provisions of section 44BB of the I.T. Act, 1961. (ii) Whether the CIT (A) has erred in not appreciating the fact that section 44BB of the Act is a self-contained code providing for computation of profit at a fixed percentage of gross receipts of the assessee and all the deductions and exclusions from the gross receipts are deemed to have been allowed to the assessee. (iii) Whether the CIT (A) has erred in not appreciating the fact that once the receipts a....
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....We have examined the issue of inclusion of service tax and VAT with reference to the provisions of Section 44BB in the light of the judgment of Hon'ble Delhi High Court in the case of Pr. CIT Vs. Mitchell Drilling International Pvt. Ltd. 380 ITR 130 which held as under: "that for the purposes of computing the presumptive income of the assessee for the purposes of Section 44BB the service tax collected by the asses see on the amount paid to it for rendering services was not to be included in the gross receipts in terms of Section 44BB(2) read with Section 44BB(1). The service tax is not an amount paid or payable, or received or deemed to be received by the assessee for the services rendered by it. The assessee only collected the ser....
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....e. It was argued that the assessee was entitled to the beneficial provision of or interpretation under the domestic law in view of the provision contained in section 90(2) of the Act. Therefore, the PE was not the creditor of the income- tax department. Accordingly, the indebtedness was not effectively connected with the PE. It was further mentioned that a debt-claim in respect of which interest was paid will be effectively connected with the PE and will form part of its business assets, if the economic ownership of the debt-claim, was allocated. 9. The ld. DR argued that the assessee was carrying on business through its Permanent Establishment in India and since interest income was not covered by the provision contained in section 44BB ....
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....e Act. If tax payable under the Act is lesser than the tax payable under the treaty, it can be concluded that the provisions of the Act are more beneficial to the assessee. However, if the tax payable by the assessee under the treaty is lesser than the tax payable under the Act, the assessee shall have the benefit of the DTAA. If we compute the income of the assessee under the head "other sources", the net income by way of interest received from the income-tax department shall amount to Rs. 21,416,478/-. This amount will be taxed at the rate applicable to a foreign company, which is more than 15%. Therefore, on making the assessment of tax under the treaty and the under the Act, it will be found that tax payable under the Act is more than t....
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....PE because that would render provision contained in paragraph 4 of Article XI redundant Thus, there may be cases where interest may be taxable under the Act under the residuary head and yet be effectively connected with the PE. The bank interest in this case is an example of effective connection between the PE and the income as the indebtedness is closely connected with the funds of the PE. 14. The relevant Article of Indo-US DTAA with regard to interest are as under: "ARTICLE 11 - Interest 1. Interest arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State. 2. However, such interest may also be taxed in the Contracting State in which it arises, and ....