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TMI Blog2006 (12) TMI 256X X X X Extracts X X X X X X X X Extracts X X X X ..... fficer found that the assessee received an aggregate sum of Rs. 1,65,64,444 from Cairn Energy India Pvt. Ltd. comprising of two amounts, namely, - (i) mobilization charges amounting to Rs. 60,45,694; and (ii) de-mobilization charges amounting to Rs. 1,05,18,750. It appears that the assessee offered the aforesaid amount for taxation, but at the time of assessment contended that 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 do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amounts of Rs. 21,99,110 and Rs. 75,24,234, being reimbursement of expenses such as meals, accommodation charges and consumables on cost, etc. The assessee relied on the decision of aforesaid Sedco Forex International Drilling Inc.'s case (supra) to support its case, in which it was held that reimbursement of expenses could not be treated as a part of contractual 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 separa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... round Nos. 5 and 6 are against inclusion of the amount reimbursement of expenses in the receipts for the purpose of section 44BB of the Act. It is mentioned that its case is covered by the decision of aforesaid Sedco. 4. Before us, in regard to ground Nos. 1 to 4, the learned counsel for the assessee relied on the decision of Saipem SPA (supra) 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oils in India; and (b)the amount received or deemed to be received in India by or on behalf of the assessee 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 prosecuting for, or extraction or production 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 c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... buted 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, 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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