TMI Blog2016 (10) TMI 885X X X X Extracts X X X X X X X X Extracts X X X X ..... tunity of being heard in the matter and to file details/submissions required in this regard. Uuphold the action of the AO in charging the assessee interest under sections 234C and 234D of the Act. See Commissioner of Income Tax Versus Anjum MH Ghaswala And Others [2001 (10) TMI 4 - SUPREME Court ] - ITA No. 457/Mum/2015 - - - Dated:- 2-9-2016 - Shri Shailendra Kumar Yadav, Judicial Member and Shri Jason P. Boaz, Accountant Member For The Appellant : Shri Paras Savla and Ms. Priyanka Shah For The Respondent : Shri Anandi Verma ORDER Per Jason P. Boaz, A.M. This appeal by the assessee is directed against the order of the DDIT (IT), Range 4 Mumbai dated 14.11.2014 passed under section 143(3) r.w.s. 144C(13) of Income Tax Act, 1961 (in short 'the Act'), pursuant to the directions issued by the Dispute Resolution Panel-II Mumbai dated 18.09.1014. 2. The facts of the case, briefly, are as under: - 2.1 The assessee-company, engaged in the business of transportation of cargo and operation of ships in international traffic filed its return of income for A.Y. 2011-12 declaring total income of ₹ 38,75,68,616/-. The case was taken up for sc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terest amounting to INR 2,34,228 under Section 234C of the Act. 4.2 The Appellant prays that the learned DDIT be directed to delete the interest levied under Section 234C of the Act. 5. GROUND 5: Erroneous levy of interest under Section 234D of the Act 5.1 On the facts and circumstances of the case and in law, the learned DDIT erred in levying interest - amounting to INR 10,58,987 under Section 234D of the Act. 5.2 The Appellant prays that the learned DDIT be directed to delete the interest levied under Section 234D of the Act. 6. GROUND 6: Initiation of penalty proceeding for the levy of penalty under Section 271(1)(c) 6.1 On the facts and circumstances of the case and in law, the learned DDIT erred in initiating penalty proceeding under section 271(1)(c) of the Act. 6.2 It is prayed that the learned DDIT be directed to drop the penalty proceeding under section 271(1)(c) of the Act. 4. Ground No. 1 (1.1 1.2) - Inclusion of service tax for the purpose of presumptive income under Section 44B of the Act 4.1 In these grounds the assessee has assailed the impugned order of the AO for including the amount of ₹ 1,79, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rib) and for A.Y. 2010-11 in ITA Nos. 7498/Mum/2013 524/Mum/2014 dated 31.07.2015. In the order for A.Y. 2010-11, the Coordinate Bench, after considering the decision in the case of China Shipping Container Lines (Hong Kong) Co. Ltd. (supra), held as under at paras 3 to 5 thereof: - 3. At the outset, the ld. Counsel for the assessee submitted that this issue is covered in favour of the assessee by the Tribunal order in assessee s own case for the Assessment Years 2007-08 and 2008-09 in ITA No.7809/Mum/2010 and 7365/Mum/2012. On the other hand, Ld. DR submitted that though this issue is covered in favour of the assessee by the Tribunal in assessee s own case, however, there are various contrary decision, which fact has been noted by the DRP, itself in the impugned order. They have followed Tribunal decision of China Shipping Container Lines (Hongkong Co. Ltd.) reported in 145 ITD 230, to decide this issue against the assessee. 4. After considering the rival contentions and on perusal of the impugned orders, we find that the main issue which has been challenged is, whether the service tax is to be treated as part of the total receipts for the purpose of computing the Pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or facilities or supply specified under section 44BB provided by the Assessee in the total receipts for the purpose of determining presumptive profit of 10% under section 44BB. It is observed that the said decision of Delhi Bench of ITAT in the case of Deputy Director of Income Tax vs Technip Offshore Contracting B.V. (supra) was relied upon by the Rely in support of its case on the similar issue Case of Islamic Republic of Iran Shipping Lines (supra) before Mumbai Bench of ITAT and relying on the decision of the Hon'ble Bombay High Court in the case Sudarshan Chemical Industries 242 ITR 769 and that of Hon'ble Uttarakhand High Court in the case of DT Vs. Schlumberger ASIA Service Ltd. (supra) it was held by the Mumbai benches that the service tax, which is a statutory liability, would not involve any element of profits and since the service provider has collected the same from its customers on behalf of the Government, it cannot be included in the total receipts for determining the presumptive income of the assessee under section 44B. The decision of Mumbai bench in the case of Islamic Republic of Iran Shipping Lines (supra) has been subsequently followed by the Tribunal a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or deemed to be received by the assessee for services rendered by it. The assessee is only collecting the service tax for passing it on to the government. Their Lordships at para 19 of their order held that for the purpose of computing the presumptive income of the assessee under section 44BB of the Act, the service tax collected by the assessee on the amount paid for rendering services is not to be included in the gross receipts. 4.4.3 Respectfully following the decision of the Hon'ble Delhi High Court in the case of Mitchell Drilling International Ltd. (supra) and of the Coordinate Bench of this Tribunal in the assessee s own case for assessment years 2007-08, 2008-09 2010-11 (supra), we hold that for the purpose of computing the presumptive income of the assessee under section 44BB of the Act, since service tax collected by the assessee does not have any element of income, it therefore cannot form part of the gross receipts and consequently delete the addition made in this regard by the authorities below. Accordingly, ground 1 (1.1 1.2) of the assessee s appeal is allowed. 5. Ground No. 2 (2.1) has been raised by the assessee as an alternative ground without pre ..... X X X X Extracts X X X X X X X X Extracts X X X X
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