TMI Blog2015 (1) TMI 571X X X X Extracts X X X X X X X X Extracts X X X X ..... ational Drilling Inc C/o Nangia & Company Versus Assistant Director of Income Tax, International Taxation [2014 (1) TMI 1322 - ITAT DELHI] - service tax being a statutory liability, would not involve any element of profit and accordingly, the same could not be included in the total receipts for determining the presumptive income – thus, service tax paid by the assessee could not form part of amount for the purpose of deemed profits u/s 44BB unlike the other amounts received towards reimbursement – Decided in favour of assessee. Chargeability of interest u/s 234B – Held that:- Following the decision in Baker Hughes Asia Pacific Ltd., C/o Nangia & Co., and others Versus Addl. Director of Income-tax, International Taxation, Dehradun [2014 (7) TMI 601 - ITAT DELHI] The AO is directed not to charge interest u/s 234B in respect of all contracts entered into by the assessee with various organizations in India except with respect to the contracts entered into with HOEC and ONGC - as far as income taxable u/s 44BB in respect of various contracts are concerned, the assessee itself has accepted the liability from the very beginning - it cannot be inferred that assessee would have made any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in ITA No.5284/Del/2011 in the case of Sedco Forex International Drilling inc Vs. Addl. Director of Income-tax wherein it was held that service-tax receipts were not includible in the gross receipts for the purpose of determining income under section 44BB of the Income-tax Act, 1961. Your appellant prays that the erroneous order be cancelled and appropriate relief may be granted to the appellant. 3. In the Revenue's appeal, vide ITA No.190/Del/2013, following grounds are raised:- (i) Whether on the facts and circumstances of the case, the CIT(A) has erred in holding that the hire of equipment and personnel was not in the nature of FTS and equipment Royalty squarely covered in the definition provided u/s 9(1)(vi) and 9(1)(vii) of the IT Act, 1961 respectively. (ii) Whether on the facts and circumstances of the case, the CIT(A) has erred in holding that the income of the assessee was taxable under the provisions of sec. 44BB even though the nature of services rendered by the assessee were in the nature of royalty and FTS and not for a project undertaken by the assessee. (iii) Whether on the facts and circumstances of the case, the CIT(A) has erred in holding tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e time or before the hearing of the appeal. 4. At the time of hearing before us, both the parties fairly admitted that ground Nos.1 2 of the assessee's appeal and all the grounds in the Revenue's appeal are squarely covered by the decision of ITAT in assessee's own case for AY 2007-08 and 2008-09 vide ITA No.5283/Del/2010 420/Del/2012. They agreed that in the aforesaid case, the ITAT accepted the assessee's contention that Section 44BB is applicable in the case of the assessee and they restored the matter to the file of the Assessing Officer for attributing the income out of two contracts to the extent of operations relating to sales carried out in India. Both the parties agreed that the matter can be set aside in this year also and restored to the file of the Assessing Officer for recomputing the assessee's income in the light of the direction of ITAT in assessee's own case for AY 2007-08 2008-09 (supra). In view of the above, we, respectfully following the decision of ITAT in assessee's own case for AY 2007-08 2008-09 (supra), set aside the issue raised by the assessee vide ground Nos.1 2 and by the Revenue vide ground Nos.1 to 8 to the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowing the decision of Hon'ble Jurisdictional High Court in the case of Director of Income Tax (International Taxation) and Another Vs. Schlumberger Asia Services Ltd. - [2009] 317 ITR 156 (Uttarakhand). No contrary decision of the Hon'ble Jurisdictional High Court has been pointed out. In view of the above, we, respectfully following the above decision of Hon'ble Jurisdictional High Court and also the decision of ITAT in assessee's own case cited supra, direct the Assessing Officer to exclude service tax from the gross receipts for the purpose of determining the income under Section 44BB of the Income-tax Act, 1961. Accordingly, ground Nos.1 2 of the assessee's appeal are allowed. 8. Respectfully following the above decision of ITAT and the decision of Hon'ble Uttarakhand High Court in the case of Director of Income Tax (International Taxation) and Another Vs. Schlumberger Asia Services Ltd. - [2009] 317 ITR 156, we direct the Assessing Officer to exclude service tax from the gross receipt for the purpose of determining the income under Section 44BB of the Income-tax Act, 1961. Accordingly, ground Nos.3 4 of the assessee's appeal are allowed. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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