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2015 (11) TMI 1546 - ITAT MUMBAI

2015 (11) TMI 1546 - ITAT MUMBAI - TMI - Inclusion of service tax in computation of presumptive income under section 44BB - Held that:- Service tax would not form part of gross receipt for the purpose of income computation under section 44BB of the Act. See Director of Income Tax vs. Mitchell Drilling International P. Ltd [2015 (10) TMI 259 - DELHI HIGH COURT] - Decided in favour of assessee. - Interest under section 234B allowable in the case of nonresident - Held that:- In appeal DRP-II gr .....

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nresident. - Decided in favour of assessee. - ITA No. 1023/Mum/2014, ITA No. 659/Mum/2014 - Dated:- 6-11-2015 - SHRI SHAILENDRA KUMAR YADAV, JM AND SHRI RAMIT KOCHAR, AM Revenue by: Shri S.K. Saikia Assessee by: Shri Milin Thakore O R D E R PER SHAILENDRA KUMAR YADAV, JM These are cross appeals by assessee and Revenue arising out of the order of DRP-II. 2. The issue in assessee s appeal is with regard to inclusion of service tax in computation of presumptive income under section 44BB of the I.T. .....

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over in the said decisions was determined by the context. The later decision of the Supreme Court in CIT v. Lakshmi Machine Works (supra) which sought to interpret the expression turnover was also in another specific context. There the question before the Supreme Court was whether excise duty and sales tax were includible in the total turnover which was the denominator in the formula contained in Section 80 HHC (3) as it stood in the material time? The Supreme Court considered its earlier decisi .....

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t form part of the turnover . The object of the legislature in enacting Section 80 HHC of the Act was to confer a benefit on profits accruing with reference to export turnover. Therefore, "turnover" was the requirement. Commission, rent, interest etc. did not involve any turnover. It was concluded that sales tax and excise duty like the aforementioned tools like interest, rent etc. also do not have any element of turn over . 15. In CIT v. Lakshmi Machine Works (supra), the Supreme Cour .....

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rt of the gross receipts for the purposes of computing the presumptive income of the Assessee under Section 44 BB of the Act. 16. The Court concurs with the decision of the High Court of Uttarakhand in DIT v. Schlumberger Asia Services Ltd (supra) which held that the reimbursement received by the Assessee of the customs duty paid on equipment imported by it for rendering services would not form part of the gross receipts for the purposes of Section 44 BB of the Act. 17. The Court accordingly hol .....

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or passing it on to the government. 18. The Court further notes that the position has been made explicit by the CBDT itself in two of its circulars. In Circular No. 4/2008 dated 28th April 2008 it was clarified that Service tax paid by the tenant doesn't partake the nature of "income" of the landlord. The landlord only acts as a collecting agency for Government for collection of Service Tax. Therefore, it has been decided that tax deduction at source) under sections 194-I of Income .....

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