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2015 (1) TMI 571 - ITAT DELHIOffshore supply of material – Chargeability u/s 44BB - Whether the CIT(A) erred in not appreciating that even if any part of the transaction of offshore supply of material was executed in India, only such profits could be held taxable in India as were attributable to the Indian permanent establishment of the appellant and not the entire receipts – Held that:- Following the decision in Baker Hughes Asia Pacific Ltd., C/o Nangia & Co., and others Versus Addl. Director of Income-tax, International Taxation, Dehradun [2014 (7) TMI 601 - ITAT DELHI] - section 44BB is applicable in the case of the assessee and they restored the matter to the file of the AO for attributing the income out of two contracts to the extent of operations relating to sales carried out in India – thus, the matter is to be remitted back to the AO for recomputation of income – Decided in favour of assessee. Determination of income u/s 44BB – Inclusion of service tax in the gross receipts – 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] - service tax being a statutory liability, would not involve any element of profit and accordingly, the same could not be included in the total receipts for determining the presumptive income – thus, 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. Chargeability of interest u/s 234B – Held that:- Following the decision in Baker Hughes Asia Pacific Ltd., C/o Nangia & Co., and others Versus Addl. Director of Income-tax, International Taxation, Dehradun [2014 (7) TMI 601 - ITAT DELHI] The AO is directed not to charge interest u/s 234B in respect of all contracts entered into by the assessee with various organizations in India except with respect to the contracts entered into with HOEC and ONGC - as far as income taxable u/s 44BB in respect of various contracts are concerned, the assessee itself has accepted the liability from the very beginning - it cannot be inferred that assessee would have made any representation which would have influenced the deductor companies for not deducting the tax - as far as contract with HOEC and ONGC are concerned, income arose in India – thus, Following DIT-I, International Taxation Versus Alcatel Lucent USA, Inc., Alcatel Lucent World Services Inc. [2013 (11) TMI 734 - DELHI HIGH COURT] the interest u/s 234B is leviable – Decided partly in favour of Assessee.
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