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TMI Blog2012 (7) TMI 250X X X X Extracts X X X X X X X X Extracts X X X X ..... d on facts and in law in adding a sum of Rs. 97,167,971/- to the gross receipts of the appellant to be taxed u/s 44BB without appreciating that the said amount represented service tax. Levy of Interest 1.That the assessing officer erred on facts and in law in levying interest under section 234B of the Act especially when there was no liability on the assessee to pay advance tax under section 209(1)(d) of the Income-tax Act,1961. The appellant craves leave to add to, alter, amend or vary from the above grounds of appeal at or before the time of hearing." 2. Adverting first to ground no.1 in the appeal, facts, in brief, as per relevant orders are that e-return declaring income of Rs. 28,24,41,510/- filed on 29.09.2008 by the assessee, a foreign company having permanent establishment in India, was selected for scrutiny with the service of a notice u/s 143(2) of the Income-tax Act, 1961 (hereinafter referred to as the Act), issued on 31st August, 2009. During the course of assessment proceedings, the Assessing Officer (A.O. in short) noticed that the assessee reflected income u/s 44BB of the Act in terms of two contracts with ONGC. While referring to memorandum of understanding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was incurred by the assessee on behalf of ONGC and it was later reimbursed by ONGC to the assessee. The Assessing Officer proposed to tax these receipts u/s 44BB. The assessee has made detailed submissions and cited a number of decisions to support the argument that fuel recharge and service tax reimbursement have no element of income. 3.2 The Panel has considered the submissions made. It is noted that this issue has been decided in favour of the department by the Jurisdictional High Court in the case of Halliburton Offshore Service Inc. (300 ITR 265) wherein it has been held that reimbursement of expenditure is includible in the taxable income u/s 44BB. It has been stated by the assessee that subsequent to the above decision the Uttarkhand High Court has decided the mater in favour of the assessee in the case of Schlumberger Asia Services Ltd. (317 ITR 156). However, as the appeals of the assessee and department are pending in above cases before the Supreme Court this Panel is of the view that it would not interfere on this issue at this stage. The Assessing Officer is therefore directed to make the addition as proposed by her in the draft order." 4. The assessee is now in appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he amounts, (A) paid to the assessee (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 oils in India, and (B) payable to the assessee (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 oils in India. Clause (b) of sub-s. (2) refers to the amounts, (A) received by assessee in 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 oils outside India, and (B) deemed to be received by the assessee in 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 oils outside India. 6. Thus, it is clear from the perusal of s. 44BB that all the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rpose of determination of presumptive profit u/s 44BB of the Act. It is well established that section 44BB of the Act is a special provision, treating 10 per cent of the aggregate amount specified in sub-s. (2) of s. 44BB as deemed profits and gains of such non-resident assessee who is engaged in the business of providing services or facilities in connection with, or supplying plant and machinery on higher used, or to be used, in the prospecting for, or extraction or production of, mineral oils. The amount referred in sub-s. (2) of s. 44BB are the amounts (a) paid to the assessee (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 higher used, or to be used, in the prospecting for, or extraction or production of, mineral oils in India, (b) payable to the assessee (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 higher used, or to be used, in the prospecting for, or extraction or production of, mineral oils in India, (c) received by the assessee in India on account of the provision of services and facilitie ..... 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