TMI Blog2009 (5) TMI 863X X X X Extracts X X X X X X X X Extracts X X X X ..... o whom services were provided, reimbursed certain expenses and losses suffered by the assessee, totalling Rs 4,40,25,412. This amount comprised of the following receipts as noted in the assessment order: 1. Reimbursement of Service Tax by the ONGC: Rs. 74,36,201 2. Reimbursement of cost of tools lost in hole by the ONGC: Rs. 3,57,52,830 3. Repair of machinery: Rs. 6,81,858 4. Reimbursement of Air-Fare from RIL Rs. 1.54,523 Total : Rs. 4,40.25,412 The Assessing Officer was of the view that above receipts were chargeable to tax u/s 44BB of Income-tax Act. 3. On appeal, CIT (Appeals) held that above amount could not b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ected to tax u/s 44BB of Income-tax Act. The impugned order of CIT (Appeals) on the three receipts is hereby set aside and order of Assessing Officer is restored. 6. We are now left with re-imbursement of cost of tools lost in hole for which assessee received re-imbursement of Rs. 3,57,52,830 from ONGC as per contract between the parties. The learned Departmental Representative submitted that above sum is liable to be included as u/s 44BB(2) as under the above provision, "any sum received" is to be charged to tax. She pointed out that provision start with a non obstante clause, "Notwithstanding anything to the contrary contained ..". Therefore, this section is overriding. The question whether receipt is revenue or capital is not rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee as per direct decision of jurisdictional High Court in the case of CIT v. Schlumberger Asia Services Ltd., dated 26 October, 2007. The substantial question considered in that case also related to compensation for loss of capital assets. Substantial questions sought in that case were as under: "1. Whether, the ld. ITAT was legally justified in law and on facts in holding that the amount of compensation received from the ONGC and Insurance Company are not to be included for computation of Income of the assessee u/s 44BB of the IT Act, 1961? 2. Whether the ld. ITAT was legally justified in law and on facts in holding that the interest u/s 234B is not chargeable from the assessee in spite of the fact that the assessee fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vices or facilities or supply of plant and machinery on hire used or used to be in extraction or production etc. of mineral oil in India. There is nothing to suggest in the section that all sorts of receipts including capital receipts are required to be taken into account for computing assessee's income under section 44BB of the Income-tax Act. We, therefore, find force in the contention advanced on behalf of the assessee. The assessee is further justified in supporting his claim on the basis of decision of Hon'ble Supreme Court in the case of Union of India v. Gosalia Shipping P. Ltd. [1978] 113 ITR 307 . It is relevant to mention that even ONGC did not treat above receipts as receipts for services provided by the assessee and did not dedu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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