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2014 (1) TMI 1580 - AT - Income TaxEstimation of profits u/s 44BB - Mobilization fee for work carried outside India - Held that:- Relying upon the decision in Sedco Forex Inc. v. CIT [2007 (9) TMI 196 - UTTARAKHAND HIGH COURT] - Mobilization charges paid to assessee by ONGC had no nexus with the actual amount incurred by assessee for transportation of drilling units of rigs to India – Mobilization charges weren’t reimbursement of expenditure – In view of fictional taxing provision u/s 44BB, AO is justified in adding the amount received by assessee towards mobilization charges for the purpose of imposing income tax - Decided against assessee. Reimbursement of communication charges and repair of equipments - Held that:- Relying upon the decision in CIT v. Halliburton Offshore Service Inc. [2007 (9) TMI 230 - UTTARAKHAND HIGH COURT] - As per section 44BB - 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 profit and gains of the assessee at the rate of 10% - Section 44BB provides by a legal fiction to be the profits and gains of the non-resident assessee engaged in the business of exploration at the rate of 10% of the aggregate amount specified in sub section (2) - The Assessing Officer added the said amount which was received by the non resident company rendering services as per provisions of sec. 44BB to the ONGC - Decided against assessee. Reimbursement of service tax - Held that:- Relying upon the decision in M/s Sedco Forex International Drilling Inc C/o Nangia & Company Versus Assistant Director of Income Tax, International Taxation [2014 (1) TMI 1322 - ITAT DELHI] - service tax being a statutory liability cannot form part of gross receipts for the purpose of deemed profit u/s 44BB - Decided in favour of assessee.
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