TMI Blog2016 (6) TMI 1320X X X X Extracts X X X X X X X X Extracts X X X X ..... does not pertake a nature of the income of the landlord and that landlord only collecting tax for government for collecting income tax. In Oceaneering International GMBH (2015 (11) TMI 1546 - ITAT MUMBAI), the Co-ordinate Bench of this Tribunal while considering the issue, whether service tax collected by the assessee-company does not have any element of income and cannot be form part of the gross receipt for the purpose of computing the presumptive income of the assessee u/s. 44BB of the Act and after considering the almost identical fact answered the issue in favour of the assessee, - ITA No.1236/Mum/2013 And ITA No.3068/Mum/2014 - - - Dated:- 29-6-2016 - SHRI B.R.BASKARAN, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER Assessee by : Shri Neeraj Agarwala (AR) Revenue by : Shri Jasbir Chauhan (CIT) O R D E R PER PAWAN SINGH, JM: 1. These two appeals filed by the assessee against the order of CIT(A) dated 30.11.2011and 02.01.2014 for Assessment Years (AYs) 2009-10 2010-11 respectively, were heard together and are decided by common order as in both the appeals identical grounds are raised. For appreciation of fact first we shall take up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Halliburton Offshore Services Inc. (2008) 300 ITR 265/169 Taxman 138 dated 20.09.2007 is against the assessee and further seeks reliance on the written submission filed by the Revenue on record. Ld. DR for Revenue further relied on the decision of China Shipping Container Lines, HDFC Bank vs. DCIT (ITA No. 3724/M/2012 dated 23.09.2015), the decision of Uttrakhand High Court in SEDCO Forex International INC vs. CIT (299 ITR 238) (Ukd.), and the decision of jurisdictional High Court CIT vs. Thane Electrical Supply Ltd. 4. We have considered the rival contention of the parties and gone through the written submission filed by Ld. DR for Revenue. The Hon ble Delhi High Court in ITA No. 403/2013 in case titled as DIT vs. Mitchell Drilling International Pvt. Ltd. while considering almost identical issue in respect of the assessee who is also engaged in the similar business as of the assessee held as under: 9. Section 44BB begins with a non obstante clause that excludes the application of Sections 28 to 41 and Sections 43 and 43A to assessments under Section 44BB. It introduces the concept of presumptive income and states that 10% credit of the amounts paid or payable or deemed to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... defined to include sales tax collected by the dealer on inter-state sales. Upholding the validity of the said statute the Supreme Court held that the expression 'turnover' means the aggregate amount for which goods are bought or sold, whether for cash or for deferred payment or other valuable consideration, and when a sale attracts purchase tax and the tax is passed on to the consumer, what the buyer has to pay for the goods includes the tax as well and the aggregate amount so paid would fall within the definition of turnover. Since the tax collected by the selling dealer from the purchaser was part of the price for which the goods were sold, the legislature was not incompetent to enact a statute pursuant to Entry 54 in List II make the tax so paid a part of the turnover of the dealer. 14. In the considered view of the Court, both the aforementioned decisions were rendered in the specific contexts in which the questions arose before the Court. In other words the interpretation placed by the Court on the expression trading receipt' or. 'turnover' in the said decisions was determined by the context. The later decision of the Supreme Court in CIT v. Lakshmi M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ose of Section 44 BB of the Act. 17. The court accordingly, holds that for the purpose of computing presumptive income of the assessee for the purpose of section 44BB of the Act, the service tax collected by the assessee on the amount paid by it for rendering services is not to be included in the gross received in term of section 44BB(2), read with section 44BB(1). The service tax is not an amount paid or payable, received or demand to be received by the assessee for the services rendered by it. The assessee only collecting service tax for passing it on the Government. 18. The Court further notes that the position has been made explicit by the CBDT itself into of its circulars. In circular No 4/2008 dated 28 April 2008 it was clarified that service tax paid by the tenant does not pertake the nature of income of the landlord. The landlord only acts as a collecting agency for the Government for collection of service tax. Therefore, it has been decided that tax deduction at source under section 194 I of Income Tax Act would be required to be made on the amount of rent paid/payable without including the Service Tax. In Circular No,1/2004, dated 30 January 2014, it has been cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cular 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 194J of Income Tax Act would be required to be made on the amount of rent paid/payable without including the service tax. 'In Circular No. 1/2014 dated 13th January 2014, it has been clarified that service tax is not to be included in the fees for professional services or technical services and no TDS is required to be made on the service tax component under Section 194J of the Act. 19. The question framed, is therefore, answered in the negative i.e. favour of the Assessee and against the Revenue. 5. We have also considered the oral as well as written submission filed by the DR of the revenue. Ld DR for Revenue heavily relied upon a case of CIT vs. Halliburton Offshore Services Inc. reported vide 300 ITR 265/ (2008) taxman138(Ukd) (supra). With utmost regards to the decision of Uttrakhand High Court in Halliburton Offshore Services Inc, the issue before Hi ..... 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