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2021 (12) TMI 930 - AT - Income TaxGross revenue chargeable to tax u/s 44BB - whether service tax is includable in the gross revenue for computing profits under presumptive provisions of section 44BB or not ? - HELD THAT:- The issue of excludability of service tax in the gross receipts is squarely covered by the judgment in the case of Mitchell Drilling International Pty Limited [2015 (10) TMI 259 - DELHI HIGH COURT] wherein the Hon'ble Delhi High Court has held that service tax being statutory levy should not form part of gross receipts as per provisions of section 44BB. Hon’ble High Court of Uttarakhand in the case of DIT International Taxation Vs M/s Schlumberger Asia Services Ltd [1972 (10) TMI 4 - SUPREME COURT] held that the amount reimbursed to the assessee (service provider) by the ONGC (service recipient), representing the service tax paid earlier by the assessee to the Government of India, would not form part of the aggregate amount referred to in clauses (a) and (b) of sub-section(2) of Section 44BB of the Act. The Hon’ble Court is clearly spelt that even otherwise, it is not every amount paid on account of provision of services and facilities which must be deemed to be the income of the assessee u/s 44BB . It is only such amounts, which are paid to the assessee on account of the services and facilities provided by them, in the prospecting for or extraction or production of mineral oils, which alone must be deemed to be the income of the assessee. Respectfully following the ratio of the judgment as laid down by the Hon'ble Delhi High Court and Hon’ble Uttarakhand High Court M/s Schlumberger Asia Services Ltd. [2019 (4) TMI 1177 - UTTARAKHAND HIGH COURT] we hold that the service tax receipts do not form part of receipts for computation of income in the section 44BB of the Income Tax Act. - Decided against revenue.
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