TMI Blog2016 (2) TMI 301X X X X Extracts X X X X X X X X Extracts X X X X ..... ber And Sh. O. P. Kant, Accountant Member For the Appellant : Ms. Rakhi Vimal, Sr. DR For the Respondent : None ORDER Per Diva Singh, JM The present appeal has been filed by the Revenue assailing the correctness of the order dated 14.11.2013 of CIT(A)-XXIX, New Delhi pertaining to 2008-09 assessment year on the following grounds:- 1. On the facts and in the circumstances of the case Ld. CIT(A) has erred in holding that the service tax was not the part of the gross receipts to be taxed u/s 44D r.w.s 115A of the Income Tax Act, 1961. 2. The appellant craves to add, amend, modify or alter any grounds of appeal at the time or before the hearing of the appeal. 2. No one was present on behalf of the assessee at the time of hearing and notice sent to the address has come back unserved. Accordingly it was considered appropriate to proceed with the present appeal ex-parte qua the assessee respondent on merit. 3. A perusal of the record shows that the assessee company incorporated in France and is in the business of providing consulting, advisory and supervision services in the field of road infrastructure projects. During the year, the assessee as p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceipt that had to be taxed. There is no scope for reducing the amount of service tax from gross value of services. The AO relied upon Siem Offshore Inc. (AAR no. 875 of 2010) and ITAT Delhi's Ruling in case of Technip Offshore Contracting BV (ITA no. 4613/Del/07). The appellant has challenged this action of the AO in present appeal. 4.1. The assessee s submission made before him were summed up vide para 4.1 4.2 in the following manner:- 4.0 Appellant's Case: 4.1. During the course of appellate proceedings, the appellant submitted that similar issue has been decided by then CIT(A) for A.Y. 2007-08 vide-order 4ated 29.07.2011 in assessee's own case and Hon'ble ITAT, Delhi vide its order dated 18.12.2012,has confirmed the relief granted by then CIT(A). The appellant has submitted that facts of the case under consideration are identical to the facts in the preceding A.Y. 2007-08. 4.2. The appellant has submitted that as per service tax law, the service tax is payable by the recipient of the service. But responsibility of its collection and deposit is imposed on renderer of the service for the convenience of its collection. Therefore, under statu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 in assessee s own case and Hon ble ITAT, Delhi vide its order dated 18.12.2012 has confirmed the relief granted by then CIT(A). The appellant has submitted that facts of the case under consideration are identical to the facts in the preceding A.y.2007-08. 4.2. The appellant has submitted that as per service tax law, the service tax is payable by the recipient of the service. But responsibility of its collection and deposit is imposed on renderer of the service for the convenience of its collection. Therefore, under statutory requirement, the appellant collected service tax from its clients and deposited the same to the respective authorities. There is no element of income comprised in the service tax collected and, therefore. it cannot be aggregated with FTS for taxation on gross basis. In no case, service tax can be the amount owned by the appellant even though it is the separately mentioned in the invoices raised by the appellant. The amount is payable to the government under statute and the appellant has no lien on this amount. The appellant has relied upon following rulings: (i) Islamic Republic of Iran Shipping Lines vs. DCIT (ii) ACIT vs. Louis Berger Inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t from the clients and tax was payable on the gross receipts. The Assessing Officer relied upon the judgment of Hon ble ITAT in the case of Technip Offshore Contracting BV (2009) 29 SOT 33 (Del.). (emphasis provided) 8.1. It is further seen in para 4 that reliance was placed upon DDIT vs M/s Mitchell Drilling international Pte. Ltd. [2012] 24 Taxmann.com 390 [Del.] as would be evident from the following extract from the order of the Co-ordinate Bench:- 4. At the very outset, Ld. Counsel for the assessee submitted that issue raised in this appeal is squarely covered in favour of the assessee by G Bench of the ITAT, Delhi as reported in (2012) 24 Taxmann.com 390 (Delhi) dated 29.06.2010 which has further been followed by E bench, ITAT, Delhi in the case of DDIT vs. M/s Mitchell Drilling International Pty. Ltd., I.T.A. No.698/Del./2012 dated 31.08.2012 in which one of the Member is a party. Therefore, it was pleaded that since issue is squarely covered in favour of the assessee and CIT(A) s order is in conformity with the decisions of the Tribunal, therefore, relying upon these decisions, it was pleaded for confirmation of the impugned order. 5. Ld.DR could ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 facilities or supply specified u/s 44BB of the Act provided by the assessee to ONGC, have to be included in the total receipts for the purpose of determination of presumptive profit u/s 44BB, subsequently, Hon ble Uttarakhand High Court decision dated 24th July, 2009 in the case of DIT Anr. Vs. chlumberger Asia Services Ltd. ,317 ITR 156(Uttarakhand) concluded that reimbursement of custom duty paid by the assessee could not form part of amount for the purpose of deemed profits u/s 44BB unlike the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al of s. 44BB that all the amounts either paid or payable (whether in India or outside India) or received or deemed to be received (whether in India or outside India) are mutually inclusive. This amount is the basis of determination of deemed profits and gains of the assessee @ 10 per cent. Therefore, in our view, the Tribunal fell into error in not appreciating the difference between the amount and the income. Amount paid or received refers to the total payment to the assessee or payable to the assessee or deemed to be received by the assessee, whereas income has been defined under s. 2(24) of the IT Act and s. 5 and s. 9 deal with the income and accrued income and deemed income. Sec. 4 is the charging section of the IT Act and definition as well as the incomes referred in ss. 5 and 9 are for the purpose of imposing the income-tax under s. 143 (3). 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovision 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 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. The service tax is a statutory liability like custom duty. Hon ble Uttarakhand High Court in their decision in Schlumberger Asia Services Ltd.(supra) concluded that reimbursement of custom duty 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. Following the view in this decision, Mumbai Bench in their decision in Islamic Republic of Iran Shipping Lines(supra)held that 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. In the light of view taken by the Mumbai Bench, especial ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
