TMI Blog1989 (1) TMI 169X X X X Extracts X X X X X X X X Extracts X X X X ..... made to them. The ITO determined the income @ 15 per cent of the payments. In doing so, he has observed that it was agreed between the ONGC and the Income-tax department that a net rate of 15 per cent will be applied to arrive at the taxable income. The assessee's case was that section 44B of the Income-tax Act, 1961 applied to the facts of the case and, therefore, the income declared by the assessees should have been accepted. This contention has been negatived by the CIT (Appeals) as well to whom the appeals were preferred. 3. At the hearing before us, the learned counsel for the assessee placed a copy of an agreement between the ONGC and M/s Gulf Fleet Marine Operation, Inc.,Dubaiappellant in ITA No. 672/86 and it was conceded on both ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regate of the amounts specified in sub-section (2) shall be deemed to be the profits and gains of such business chargeable to tax under the head 'Profits and gains of business or profession'. (2) The amounts referred to in sub-section (1) shall be the following, namely : --- (i) the amount paid or payable (whether in or out of India) to the assessee or to any person on his behalf on account of the carriage of passengers, livestock, mail or goods shipped at any port in India ; and (ii) the amount received or deemed to be received inIndiaby or on behalf of the assessee on account of the carriage of passengers, livestock, mail or goods shipped at any port out sideIndia." The learned counsel for the assessee contended that since the ves ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ading but if a hall is hired for a marriage, the charges payable to the owner of the place are for the use and hire of the place not on account of marriage." The learned counsel for the assessee contended that this ruling is not applicable as the circumstances were different. We have already referred to the various terms of the contract between the present assessees and the ONGC and we have also referred to the terms of hire as reported in the judgment of Hon'ble the Supreme Court and it is clear that the necessary incident of the contract are similar. In the present case also, the assessees were only to place the ship or the vessel at the disposal of the ONGC and they were not interested in whether the ONGC used the ship for the carriage o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as in the case of Gulf Fleet Marine Operation, stated that such as understanding was arrived at on24-12-1981. The accounting year of the assessees ended on31-3-1982. If section 44B was clearly applicable to the facts of the present case, there was no need for such an understanding and it is unfortunate that the ONGC which is a wing of the Government of India should back out from an agreement or understanding arrived at with another Department of the same Government. 7. For the above reasons, we hold that Section 44B was not applicable to the facts of the case and the determination of income at 15 per cent having been made under an understanding with the ONGC and the determination of income at 15 per cent of the receipts having not been sh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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