Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2014 (1) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (1) TMI 301 - AT - Income TaxAmount accrue or arise in India or not as per section 5(2) r.w Section 9 of the Act Fee paid for mibilisation/demobilization of rig to/from India Held that:- The assessee is a non-resident company engaged in the business of offshore drilling as contractor with a fleet of mobile offshore drilling units employed for its customers to find and develop oil and natural gas reserves - The non-resident company had contracts with ONGC Ltd., and had offered the revenues from the contract in the return of income at 10 per cent. as deemed profits under section 44BB(1) of the Act - it did not offer for tax the reimbursement of expenses as well as receipt on account of mobilisation/ demobilisation of rigs attributable to voyage undertaken outside Indian territorial waters - Following Sedco Forex International Inc. v. CIT [2007 (9) TMI 196 - UTTARAKHAND HIGH COURT] - the mobilisation charges paid to the assessee by ONGC had no nexus with the actual amount incurred by the assessee for transportation of drilling units of rigs to the specified drilling locations in India - the mobilisation charges were not reimbursement of expenditure - ONGC was liable to pay a fixed sum as stipulated in the contract regardless of the actual expenditure which might be incurred by the assessee for the purpose thus, the Assessing Officer was right in adding the amount received by the assessee towards mobilisation charges for the purpose of imposing income-tax and the Commissioner of Income-tax (Appeals) and the Tribunal were also right in upholding the order of the Assessing Officer Decided against Assessee. Reimbursement of expenses to be included in gross receipts u/s 44BB or not Held that:- Following CIT v. Halliburton Offshore Services Inc. 2007 (9) TMI 230 - UTTARAKHAND HIGH COURT] - all the amounts either paid or payable (whether in India or outside India) or received or deemed to be received (whether in India or outside India) are mutually inclusive - This amount is the basis of determination of deemed profits and gains of the assessee at 10 per cent - The amount paid or received refers to the total payment to the assessee or payable to the assessee or deemed to be received by the assessee, whereas income has been defined under section 2(24) of the Income-tax Act and section 5 and section 9 deal with the income and accrued income and deemed income Decided against Assessee.
|