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TMI Blog2011 (11) TMI 254X X X X Extracts X X X X X X X X Extracts X X X X ..... unds:- 1. "Based on the facts and circumstances of the case, the learned Assessing Officer has erred in law and in fact, in holding that the assessee's income from services rendered is not covered by the provisions of section 44BB of the Act. Based on the facts and circumstances of the case, the learned Assessing Officer erred in law and on facts in holding that the provisions of section 44BB of the Act are not applicable to the services and facilities provided by the appellant to BG Exploration and Production India Limited in respect of offshore installation of pipelines as a part of overall construction project in connection with extraction and production of mineral oils. The appellant respectfully submits that the provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... computed on the tax refund determined u/s 143(1) of the Act and disregarding the fact that such tax refund was never granted to the appellant. The appellant respectfully submits that as per the provisions of the Act, the interest u/s 234D of the Act is not leviable and the Assessing Officer be directed to delete the interest levied at Rs. 320,128. The appellant craves leave to add, alter, vary, omit, substitute or amend the above grounds of appeal, at any time before or at the time of hearing of the appeal, so as to enable the Hon'ble Members to decide this appeal according to law. 2. Adverting first to ground nos.1 and 2 in the appeal, facts, in brief, as per relevant orders are that return in this case was filed on 19.10.2007. The ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the provisions of section 44BB of the Income-tax Act, 1961 ('the Act'). Therefore, we are inclined not to issue any direction for deviating from draft assessment order. Objection No.2 We have considered the arguments of the assessee on the ground of estimation of income @25% of the gross revenue. Since the assessee's activities assessment order not covered under the provisions of section 44BB, the assessee was required to maintain books of accounts as per the provisions of the Act and was required to gets its account audited, which it has not done. The assessee has not produced any accounts before the AO nor before the DRP. The AO has rightly estimated the profits @25%. Since no books of accounts or any reason to challenge the figur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in subsequent year is same as was relevant for the year under consideration and agreed to submit a copy of the said agreement. 4. We have heard both the parties and gone through the facts of the case as also the decision of the DRP in the subsequent assessment year 2008-09 .We find that the DRP after considering the nature of activities specified in the relevant agreement applicable for the subsequent AY 2008-09 and the findings of the AO concluded regarding applicability of provisions of sec. 44BB of the Act and estimation of profits, as under:- "5.4.2 The Panel has considered carefully the submissions made by the assessee in this regard which have been summarized in para 4.II above. It is clear from the scope of the work to be performe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd that it was only to avoid litigation it had offered the entire revenues from such supplies to tax at a deemed profit rate of 10% u/s 44BB. The assessee has also furnished a list of eleven comparables according to which the mean operating profit works out at 7.37%. The submissions made by the assessee about applying a rate of less than 10% cannot agreed to considering that the assessee had itself sought to be taxed under section 44BB(1) which provide for flat rate of 10% applicable on the gross receipts. If the assessee desired to claim a lower rate it should have filed its return under sub-section (3) of section 44BB and fulfilled the requirements laid down under that provision. As that is not the case of the assessee the profits are to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of reasons and communication thereof has been read as an integral part of the concept of fair procedure. The requirement of recording of reasons by the quasi-judicial authorities is an important safeguard to ensure observance of the rule of law. It introduces clarity, checks the introduction of extraneous or irrelevant considerations and minimizes arbitrariness in the decision-making process. We may reiterate that a 'decision' does not merely mean the 'conclusion'. It embraces within its fold the reasons forming basis for the conclusion. [Mukhtiar Singh v. State of Punjab [1995] 1 SCC 760]. As is apparent, the impugned order of the DRP suffers from lack of reasoning and is not a speaking order. The DRP did not analyse the nature of activit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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