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2017 (12) TMI 302 - AT - Income TaxTaxing of income u/s. 44BB as against section 44B - assessee had given three ships on hire that the ships were used for transporting men/goods to offshore locations of India that that the hirer was carrying the activities related to the exploration and production of mineral oil at offshore location - Held that:- Section 44BB will prevail over section 44B as it is a special section which came on statute later and deals with specific activities. If the services provided by the assessee are excluded very little purpose will be served of incorporating section 44BB for computing the profits in relation to the services connected with exploration and extraction of mineral oils. The provision will then operate in a very limited field. In our opinion the Parliament intent was not to give a limited field to the section 44BB. That is why for taking care of the activities related with oil exploration and to segregate the general shipping activities mentioned in section 44B a special provision i. e. 44BB was introduced. The ships were hired by the user for transporting men/machines to locations where it was doing exploration/production of mineral oil. Thus it was not a case of transporting goods or livestock by ships simplicitor. The activity was directly and closely related with ‘services’rendered by plant and machinery and the ships for the purpose of section 44BB have been treated as plant. As the services were rendered 'in connection with' prospecting for and exploration activities so in our opinion the income arising out of such activities has to be assessed u/s. section 44BB and not u/s. 44B of the Act. Gross receipts for the purpose of computing the presumptive income of the assessee u/s. 44BB - service tax collection addition - Held that:- Service tax collected by the assessee has to be deposited in the government by all the service-tax-collectors. On behalf of the State they collect the tax and deposit in the treasury. There is element of income in it. We hold that the order of the FAA does not suffer from any legal or factual infirmity. So confirming the same we decide the effective ground of appeal against the AO for both the AY. s.
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