TMI Blog2017 (9) TMI 1283X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee. Accordingly, following the binding judicial precedence, we decide this issue in favour of the assessee that service tax element cannot be included in the gross receipts for the purpose of computing the profit and thus, the grounds raised by the Revenue are dismissed. - I.T.A. No.6537/DEL/2014 - - - Dated:- 20-9-2017 - SHRI. G. D. AG RAWAL, PRESIDENT AND SHRI AMIT SHUKLA, JUDICIAL MEMBER For The Applicant : Shri Gaurav Dudeja, D.R. For The Respondent : Shri Amit Arora, C.A. ORDER PER AMIT SHUKLA, J.M.: The aforesaid appeal has been filed by the Revenue against the impugned order dated 9/9/2014, passed by the ld. CIT (Appeals)-II, Dehradun for quantum of assessment passed u/s. 143(3) read with 144(C)(3)(b) of the Income Tax Act, 1961 for assessment year 2010-11. The grounds raised by the Revenue in the grounds of appeal are as under:- 1. Whether on the facts and in the circumstances of the case and in law, the Ld CIT (Appeals) has erred in holding that receipts on account of service tax are not includible in gross revenue of the assessee for the purpose of computation of profits under the presumptive provisions of u/s 44BB of the Inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d shown its income under section 44BB(1) which was at 10% of gross revenue amounting to ₹ 53,14,52,047/-. The Assessing Officer, from the perusal of the payment receipts and revenue breakup submitted by the assessee, noted that assessee has not offered to tax the reimbursement of service tax receipts which is part of gross receipt from ONGC amounting to ₹ 5,51,20,576/-. In response to show cause notice by the AO, assessee submitted that statutory charges cannot form part of the amount considered for the purpose of deemed profit under section 44BB; and in support reliance was placed on the judgment of the Hon'ble Uttarakhand High Court in the case of DIT vs. Schlumberger Asia Services Ltd., 317 ITR 556. Further, reliance was also placed on various orders of Delhi Benches of ITAT. However, the Assessing Officer after detailed discussion held that entire receipts including on account of service tax is to be taken into account to determine the deemed profit of the assessee under section 44BB. He also for coming to this conclusion, relied upon another judgment of Hon'ble Uttarakhand High Court in the case of CIT vs. 4 Halliburton Offshore Services Inc., 300 ITR 265 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... computation of the Assessee's 'presumptive income' under Section 44BB of the Act? 12. In Chowringhee Sales Bureau (supra) sales tax in the sum of ₹ 32,986 was collected and kept by the Assessee in a separate 'sales tax collection account'. The question considered by the Supreme Court was: 'Whether on the facts and in the circumstances of the case the sum of ₹ 32,986 had been validly excluded from the assessee's business income for the relevant assessment year? . However, there the Assessee did not deposit the amount collected by it as sales tax in the State exchequer since it took the stand that the statutory provision creating that liability upon it was not valid. In the circumstances, the Supreme Court held that the sales tax collected, and not deposited with the treasury, would form part of the Assessee's trading receipt. 13. The decision in George Oakes (P) Ltd. (supra) was concerned with the constitutional validity of the Madras General Sales (Definition of Turnover and Validation of Assessments) Act, 1954 on the ground that the word turnover was defined to include sales tax collected by the 6 dealer on inter-st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Court approved the decision of the Bombay High Court in cn v. Sudarshan Chemicals Industries Ltd. (supra) which in turn considered the decision of the Supreme Court in George Oakes (P) Ltd. (supra). In the considered view of the Court, the decision of the Supreme Court in Lakshmi Machines Works (supra) is sufficient to answer the question framed in the present appeal in favour of the Assessee. The service tax collected by the Assessee does not have any element of income and therefore cannot form part 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 on 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 Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X
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