TMI Blog2006 (12) TMI 256X X X X Extracts X X X X X X X X Extracts X X X X ..... he total income. In this case, the payments were made outside India and substantial activity of mobilization, etc., was carried out outside India. Therefore, the Hon ble Tribunal came to the conclusion that only such part of the income, which is attributed to the activities carried on in India can be subjected to tax in the hands of the assessee as the income was received outside India. We find no reason to differ with this decision of the Hon ble ITAT in the case of Saipem SPA [ 2003 (12) TMI 280 - ITAT DELHI-B] , being the decision of the Third Member which part takes the character of the decision of the Special Bench. Therefore, respectfully following the aforesaid decision, it is held that only that part of the receipt of the mobiliz ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de-mobilization charges amounting to Rs. 1,05,18,750 were not taxable in India as the same pertained to demobilization of the drilling rig from Bombay High to Sharjahan. In this connection, it was pointed out that a major part of demobilization work was done outside Indian territorial waters and, therefore, only that part of the charges, which pertained to the work done in Indian Territorial Waters, should be taxed in India. It was explained that the assessee s case was covered by the decision of Hon ble ITAT, Delhi Bench "B" (Third Member) in the case of Saipem SPA v. Dy. CIT [2004] 88 ITD 213. However, the Assessing Officer referred to the decision of Hon ble ITAT, Delhi Bench "B" in the case of Sedco Forex International Drilling In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l receipts under section 44BB of the Act. However, the Assessing Officer did not accept this position also and he came to the conclusion that the aforesaid amounts should be included for finding out presumptive income under section 44BB of the Act. 2.2 Aggrieved by this order, the assessee moved appeal before CIT(A)-I, Dehradun. It may be added here that the assessee took two separate ground Nos. 4 and 6 in respect of demobilization charges and mobilization charges respectively. The learned CIT(A) pointed out that the Assessing Officer had rejected the case of the assessee by following the decision in the case of aforesaid Sedco, in respect of mobilization and demobilization charges. There were contrary decisions in the matter and it ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ra ) and also on the following decisions : ( i ) Dual offshore Ltd. v. Asstt. CIT [IT Appeal No. 2215 (Delhi) of 1997, dated 18-3-2002] for assessment year 1995-96; ( ii ) Dy. CIT v. Ensco Maritime Ltd. [IT Appeal No. 3869 (Delhi) of 2002, dated 15-2-2006]; ( iii ) Dy. CIT v. Dual Offshore Ltd. [IT Appeal No. 1400 (Delhi) of 2003, dated 8-3-2006]; ( iv ) Asstt. CIT v. Transocean Offshore Deep Water Drilling Inc. [IT Appeal No. 3906 (Delhi) of 2005, dated 11-10-2006] for assessment year 2003-04; and ( v ) Asstt. CIT v. Atwood Oceanics Pacific Ltd. [IT Appeal No. 4755 (Delhi) of 2005, dated 12-10-2006]. 4.1 On the basis of these orders, the case of the learned counsel was that mobilization revenues could be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction of, mineral oils outside India." 6.1 On perusal of clause ( a ) of this sub-section, it will be found that the amount paid or payable, whether in or out of India, on account of the provision of services and facilities in connection with, or supply of plant and machinery on hire used or to be used, in the prospecting for, or extraction or production of mineral oil in India is includible in the receipt mentioned in section 44BB. Thus, the aforesaid clause takes into its ambit the amount paid or payable in or out of India on provision of services, etc., for supply of plant and machinery for extraction or production of mineral oil in India. Clause ( b ) includes in its ambit the amount received or to be received in India for provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the decision of the Special Bench. Therefore, respectfully following the aforesaid decision, it is held that only that part of the receipt of the mobilization charges, which is attributable to the activities carried out in India is liable to be included in the receipts for the purpose of computing presumptive income under section 44BB of the Act. 6.2 Insofar as ground Nos. 5 and 6 are concerned, the decision of the aforesaid cases is that reimbursement of expenses is not includible in the receipts for computing presumptive income under section 44BB of the Act. Respectfully, following those decisions, it is held that the amounts reimbursed to the assessee cannot be included in the amounts referred to in section 44BB of the Act. 7. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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