TMI Blog2015 (5) TMI 582X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A) has merely followed the said decision, but yet the Assessing Officer is aggrieved that, as this decision has been challenged in appeal before Hon’ble Supreme Court, the CIT(A) ought not to have followed the same. Such a plea can only be stated and rejected. The mere fact that a binding judicial precedent has been challenged before a higher forum does not dilute, curtail or otherwise affect its binding nature. Once Hon’ble jurisdictional High Court has expressed a considered view on an issue, all the lower authorities in the judicial hierarchy, including this Tribunal as indeed the CIT(A), have to loyally follow this. There is no scope for deviating from this solemn duty. On this aspect of the matter, thus, the stand of the CIT(A) cannot be faulted - Decided in favour of assessee. Inclusion of service tax in the gross receipts for determining income under section 44BB - Held that:- Learned consel’s defence consists only of the decision of a coordinate bench of this Tribunal, in the case of Sedco Forex International Drilling Inc Vs ADIT (2012 (7) TMI 250 - ITAT, DELHI) but then in this case, the earlier binding precedent in the case of DDIT Vs Technic Offshore Contracting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isaged in 9(1)(vii) rw 44DA and 44BB and the insertion of second proviso to sub-section (1) of Section 44DA and a reference to Section 44DA in the proviso below sub-section (1) of Section 44BB. 6. Whether the CIT(A) has erred in not appreciating that proviso to Section 44BB is not inserted per majorem cautelam' but explains and clarifies the main provision as the term services or facilities used therein are not defined and the two terms used are too general in nature and thus once the payments are characterized as FTS u/s 9(1)(vii), they go outside the purview of Section 44BB and have to be taxed as FTS at applicable FTS rates as prescribed under the Act and/or DTAA. 7. Whether the CIT(A), has erred in not appreciating that assessees reliance on Jindal Drilling is misplaced since 44DA being the special provision for taxation of income in the nature of royalties and FTS where these are effectively connected with a PE, then if a special provision is made respecting a certain matter t hat matter is excluded from the general provision under the rule of Generallia specialibus non derogant and thus, its reliance on Jindal Drilling is misplaced. 8. Whether the CIT(A) has er ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quired to adjudicate on this appeal is whether or not the learned CIT(A) was justified in holding that the provisions of Section 44BB of the Act, and whether or not the learned CIT(A) was justified in holding that the interest under section 234B cannot be levied on the facts of this case. As for the second issue, as the ground of appeal number 12 clearly accepts, the issue is covered, in favour of the assessee, by a full bench decision of Hon ble jurisdictional High Court in the case of DIT Vs Maersk Co Ltd [ (20111) 334 ITR 79 (Uttarakhand)] and the CIT(A) has merely followed the said decision, but yet the Assessing Officer is aggrieved that, as this decision has been challenged in appeal before Hon ble Supreme Court, the CIT(A) ought not to have followed the same. Such a plea can only be stated and rejected. The mere fact that a binding judicial precedent has been challenged before a higher forum does not dilute, curtail or otherwise affect its binding nature. Once Hon ble jurisdictional High Court has expressed a considered view on an issue, all the lower authorities in the judicial hierarchy, including this Tribunal as indeed the CIT(A), have to loyally follow this. There is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eline Logging and TCP Services. 14. Contract No. : CB3A000017A with Cairn Energy India Pty Limited for VSP Equipment Services. 5. There is no dispute that the income earned by the assessee is from hiring of equipment and from rendering of services to the entities engaged in oil exploration work. There is also no dispute that the income so earned by the assessee was offered by the assessee to tax, on presumptive profits @ 10% under section 44BB of the Act. The point of dispute is confined to whether or not the provisions of Section 44BB will apply to the facts of this case. While contention of the assessee is that the provisions of Section 44 BB for taxability of income on presumptive basis @ 10% wi ll apply to the taxability of income so earned by the assessee, the Assessing Officer has held that the income from rendering of these services in India, through a PE- as has been claimed to be the fact situation, will be taxable as normal business income in India, as is mandated by Section 44 D A of the Act, which, in the absence of any books of accounts, has been estimated at 25% of gross receipts. The CIT(A) has, following the decision of a coordinate bench in the case of CGG ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year 2011-12 must be treated as clarificatory in nature. A reference is made to the decision of Hon ble Supreme Court, in the case of Union of India Vs Gosalia Shipping Pvt Ltd (113 ITR 307) for the proposition that when payment is made to a shipping company for time charter, its payment for hire of shipment and not for the purpose of carrying goods, and by the same logic, when payment is made by the first leg contractor to the supplier of equipment or personnel, the payment is for such equipment or personnel and not for the purposes in which the equipment or personnel are put to use. It is then submitted that the decision of PGS Geophysical AS Vs ADIT (269 CTR 433) contradicts the findings in the earlier Hon ble Delhi High Court decision in the case of DIT Vs OHM Ltd (352 ITR 406), based on which the coordinate bench has decided this issue in favour of the assesse. It is submitted that the decision of the coordinate bench in the case of Baker Hughes Asia Pacific Ltd (supra), by which this issue in appeal is stated to be covered in favour of the assesse, did not take account the binding judicial precedents in the cases of PGS Geophysical (supra) and Gosalia Shipping (supra) as also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the coordinate bench, we approve the conclusions arrived at by the learned CIT (A) and decline to interfere in the matter. 3. We see no reasons to take any other view of the matter than the view so taken by us in the above case, which was argued alongwith this appeal and in which common arguments were advanced by the parties. 4. Respectfully following the views so expressed, and respectfully following the views of the coordinate benches, we approve the conclusions arrived at by the CIT(A) and decline to interfere in the matter. 5. In the result, the appeal filed by the Assessing Officer is dismissed. 6. As regards the appeal filed by the assessee, learned counsel for the did not press in ground nos 1 to 3 as the related issues have been anyway been restored to the file of the assessee for fresh adjudication. 7. Ground no. 1 to 3 are thus dismissed as infructuous. 8. In ground no. 4, the assessee is aggrieved against CIT(A) s holding that the amount of service tax is includible in the gross receipts for determining income under section 44BB of the Income Tax Act, 1961. 9. Learned consel s defence consists only of the decision of a coordinate bench of this Tribu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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