Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2017 (1) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (1) TMI 1379 - ITAT DELHIEntitlement to benefit of section 44BB(1) on the income from contracts of non-PSC companies or such receipts would be taxable u/s. 115A/44DA as per normal provisions of the Act - Held that:- This issue is squarely covered by the order of ITAT, Delhi Bench in the case of SBS Marine Ltd. vs. ADIT (Intl. Taxation) [2015 (3) TMI 147 - ITAT DELHI ]in favour of the assessee wherein held that the revenue’s reliance on section 9(1)(vi) to categorize the assessee’s income for hire of vessels as ‘royalty’ is also not correct since clause (iva) of section 9(1)(vi) excludes amounts referred to in section 44BB. The other arguments, decisions relied on by the learned DR including the one on ‘Base erosion profit shifting’ are also not relevant in the factual matrix of the present case and considering what we have already held. In view of the above, we hold that the income of the assessee for the year under consideration is to be computed in accordance with section 44BB of the Act.- Decided in favour of assessee. Inclusion of Service Tax and Vat in gross amount for the purpose of deeming profit @ 10% u/s 44BB - Held that:- The service tax and VAT are statutory dues which are paid to the Government as liability of the assessee. A perusal of the record as well as the assessment order nowhere reveals that the Service Tax and VAT have been separately charged by the appellant company on the bills. The record further does not reveal whether the assessee has separately accounted for the amounts of Service Tax and VAT so charged, in the books of account. The assessment order also does not whisper anything as to whether the Service tax and VAT have been charged by the appellant company in terms and conditions of the agreements. These aspects, in our opinion, need proper examination and verification at the stage of Assessing Officer before deciding the question whether the Service Tax and VAT charged by the assessee would form part of the receipts or not. We, therefore, direct the AO to examine – (i) the procedure for collecting the Service Tax and VAT; (ii) whether the assessee has issued bills for charging Service Tax & VAT and if yes, whether the Service Tax and VAT have been separately charged in the bills or not and (iii) whether the Service Tax and VAT have been separately accounted for and have been accordingly paid to the Government. Accordingly, this issue is restored to the file of Assessing Officer for deciding the same afresh Interest received on Income-tax Refund - should be taxed @ 15% under Article 12 of DTAA, treaty with UK or should be taxed @ 40% as per normal provision of the Act - Held that:- This issue is covered against the assessee by the decision of Uttaranchal High Court in the case of assessee itself [2015 (5) TMI 1036 - UTTARAKHAND HIGH COURT ] wherein it has been held that interest on Income-tax Refund is taxable @ 40%. Taxability on reimbursement of expenses - Held that:- This issue is covered against the assessee and in favour of the Revenue by the decision of Hon’ble Uttarakhand High Court in the case of CIT vs. Halliburton Offshore Services Inc. [2007 (9) TMI 230 - UTTARAKHAND HIGH COURT] wherein held Sec. 4 is the charging section of the IT Act and definition as well as the incomes referred in ss. 5 and 9 are for the purpose of imposing the income-tax under s. 143 (3). Sec. 44BB is a complete code in itself. It provides by a legal fiction to be the profits and gains of the non-resident assessee engaged in the business of oil exploration @ 10 per cent of the aggregate amount specified in sub-s. (2). It is not in dispute that the amount has been received by the assessee company. Therefore, the AO added the said amount which was received by the non-resident company rendering services as per provisions of s. 44BB to the ONGC and imposed the income-tax thereon
|