TMI Blog2012 (9) TMI 564X X X X Extracts X X X X X X X X Extracts X X X X ..... other amounts received towards reimbursement - Decided against Revenue - ITA No. 698/Del./2012 - - - Dated:- 31-8-2012 - U. B. S. Bedi And J. S. Reddy, JJ. Assessee by : Amit Arora, CA Revenue by : Shri Vijay Babu Vasanta, Sr.DR ORDER Per U. B. S. Bedi, J.M. This appeal of the Revenue is directed against the order passed by the CIT(A)- XXIX, New Delhi, dated 21.10.2011, relevant to assessment year 2008-09, whereby action of the Ld.CIT(A) in holding that service tax is not part of the gross receipts that is to be computed for the purposes of taxation u/s 44BB of the I.T. Act, 1961 has been challenged.. 2. Facts indicate that the assessee is a company incorporated in Australia. It was engaged in the business o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nation of presumptive profit u/s 44BB of the Act. Since service tax is levied and collected by the service provider as an agent of the Government which he holds in trust as custodian/trustee for the Government, Service Tax is collected by the service provider and paid to the Govt. Thus the service provider is a conduit/mechanism for collecting service tax from the service recipient. The same does not become the income of the service provider. In other words, the service provider acquires no title to the receipts by way of service tax. There is no element of income, much less profits accruing to the service provider from the levy and collection of service tax. The same is a statutory levy mandated by law. Therefore, it cannot be included in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pugned order. 8. We have heard both the sides, considered the material on record and find that similar issue arose before G Bench of the tribunal in the case of Sedco Forex International Drilling Inc. vs. Addl. DIT (International Taxation) in ITA No.5284/Del./2011, has decided the issue in favour of the assessee and relevant portion of the decision, which has been dealt with by the tribunal in its order as under: 4. ..Regarding reimbursement of service tax, the ld. AR pointed out that though the ITAT Delhi Bench in their decision in the case of DIT (International Taxation) Vs. Technip Offshore Contracting BV,29 SOT 33(Delhi) concluded that service tax collected by the assessee being directly in connection with services or facili ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. Sec. 44BB provides that the deemed profits and gains under subs. (1) shall be @ 10 per cent of the aggregate amount specified in sub-s. (2). We proceed to analyze sub-s. (2). Clause (a) of sub-s. (2) refers to 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 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Sec. 44BB is a complete code in itself. It provides by a legal fiction to be the profits and gains of the non-resident assessee engaged in the business of oil exploration @ 10 per cent of the aggregate amount specified in sub-s. (2). It is not in dispute that the amount has been received by the assessee company. Therefore, the AO added the said amount which was received by the non-resident company rendering services as per provisions of s. 44BB to the ONGC and imposed the income-tax thereon. 5.1 In the light of view taken by the Hon ble jurisdictional High Court in their aforesaid decision, especially when the ld. AR accepted the position that the issue is squarely covered by the aforesaid decision while no other contrary decision was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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 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 outside India and (d) deemed to be received by the assessee in India on accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
