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2015 (1) TMI 355 - AT - Income TaxDetermination of income u/s 44BB - mobilization revenue proportionate to the voyage undertaken by the rig outside Indian territorial waters to be included in gross receipts or not – Nature of mobilization/demobilization activities - Held that:- Following the decision in WesternGeco Interational Ltd Gurgaon. Versus ADIT International Taxation, Dehradun [2014 (10) TMI 735 - ITAT DELHI] - the entire payment in question was made for the purpose of execution of the contract in India - Mobilisation is a stage payment, as part of the total consideration for execution of the contract - The assessee would be moving its machinery from one place of work to another place of work - Mobilisation is paid as an advance for such movement and is generally adjusted against running bills - Mobilisation is an incidental activity to the main activity of carrying out the contract in India – Decided against assessee. Determination of income u/s 44BB - Reimbursement of expenses to be included in the gross receipts for the purpose of determining income or not – Held that:- Following 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] - The amount had been received by the assessee - Therefore, the Assessing Officer added the said amount which was received by the non-resident company rendering services under the provisions of section 44BB and imposed the income tax – Decided against Assessee. Determination of income u/s 44BB - Receipts against the service tax to be included in the gross receipts for the purpose of determining income or not - Held that:- Following the decision in M/s Sedco Forex International Drilling Inc., C/o Nangia & Co., Versus Additional DIT, International Taxation, Dehradun [2012 (7) TMI 250 - ITAT, DELHI] - The service tax is a statutory liability like custom duty - service tax being a statutory liability, would not involve any element of profit and accordingly, it could not be included in the total receipts for determining the presumptive income - service tax paid by the assessee could not form part of amount for the purpose of deemed profits u/s 44BB unlike the other amounts received towards reimbursement – Decided in favour of Assessee.
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