TMI Blog2019 (5) TMI 424X X X X Extracts X X X X X X X X Extracts X X X X ..... e to the assessee or to any person on his behalf on account of the provision of services or facilities in connection with, or supply of plant and machinery on hire used, or to be used, in the prospecting for, or extraction or production of mineral oils in India. Thus, both the grounds are dismissed. - ITA No. 4040/DEL/2016, ITA No. 4041/DEL/2016 - - - Dated:- 2-5-2019 - Shri R. K. Panda, Accountant Member And Ms Suchitra Kamble, Judicial Member For the Appellant : Sh. Amit Arora, Sh. Vishal Mishra, CA For the Respondent : Sh. N. K. Bansal, Sr. DR ORDER PER SUCHITRA KAMBLE, JM These two appeals are filed by the assessee against the orders dated 3/05/2016 and 31/5/2016 passed by CIT(A)-2, Noida for Assessment Year 2012-13 2013-14 respectively. 2. The grounds of appeal are as under:- ITA No. 4040/DEL/2016 (A.Y. 2012-13) Based on the facts and circumstances of the case, your appellant respectfully submits the following grounds. Ground No. 1 That the Ld.CIT(A) has erred on facts and in law in affirming the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... parties and perused all the relevant material available on record. The Hon ble Apex Court in case of Sedco Forex International Inc. (supra) held as under: 47) Section 44BB starts with non-obstante clause, and the formula contained therein for computation of income is to be applied irrespective of the provisions of Sections 28 to 41 and Sections 43 and 43Aof the Act. It is not in dispute that assessees were assessed under the said provision which is applicable in the instant case. For assessment under this provision, a sum equal to 10% of the aggregate of the amounts specified in sub-section (2) shall be deemed to be the profits and gains of such business chargeable to tax under the head profits and gains of the business or profession . Sub-section (2) mentions two kinds of amounts which shall be deemed as profits and gains of the business chargeable to tax in India. Sub-clause (a) thereof relates to amount paid or payable to the assessee or any person on his behalf on account of provision of services and facilities in connection with, or supply of plant and machinery on hire used, or to be used in the prospecting for, or extraction or production of, mineral oils in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 41 and Sections 43 and 43A of the Act, the Legislature has simplified the procedure by providing that tax shall be paid @10% of the aggregate of the amounts specified in sub-section (2) and those amounts are deemed to be the profits and gains of such business chargeable to tax... . It is a matter of record that when income is computed under the head profits and gains of business or profession , rate of tax payable on the said income is much higher. However, the Legislature provided a simple formula, namely, treating the amounts paid or payable (whether in or out of India) and amount received or deemed to be received in India as mentioned in sub-section (2) of Section 44BB as the deemed profits and gains. Thereafter, on such deemed profits and gains (treating the same as income), a concessional flat rate of 10% is charged to tax. In these circumstances, the AO is supposed to apply the provisions of Section 44BB of the Act, in order to find out as to whether a particular amount is deemed income or not. When it is found that the amount paid or payable (whether in or out of India), or amount received or deemed to be received in India is covered by sub-section (2) of Section 44BB o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... served that considering the interpretation contained in the case of OTIM Ltd., reported in 352 ITR 406 (Del), the position of the case would not change specially when the services are squarely covered in consonance with what is envisaged under section 44BB of the Act. We find that the Tribunal (supra) has also held the services rendered as envisaged under section 44BB of the Act. The Ld. CIT (A) has followed the decision of the jurisdictional High Court on the issue in dispute and thus, we do not find any error in the finding of the ld. CIT-A. Section 44DA specifically covers income in the nature of fees for technical services received by a non-resident from the Indian Government and/or an Indian Concern. Any income in the nature of fees for technical services received by a non-resident from another non-resident cannot be taxed under section 44DA of the Act. Thus, the issue is squarely covered by the order of the Tribunal for A.Y. 2011-12 as facts are identical. Ground No. 2 is allowed. 11. In result, ITA No. 4040/DEL/2016 for A.Y. 2012-13 is partly allowed. 12. Now we take up appeal for A.Y. 2013-14, the ground of app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 16. We have heard both the parties and perused the material available on record. As regards Assessment Year 2013-14, the issue contested by the assessee is squarely covered against the assessee by the decision of the Hon ble Apex Court in case of Sedco Forex International Inc. (supra) wherein it has been held that: a. That mobilization charges are to be included in gross receipts for the purpose of provisions of section 44BB of the Income Tax Act, 1961. b. The reimbursement charges are to be included in gross receipts for the purpose of provisions of section 44BB of the Income Tax Act, 1961. In the present Assessment Year also the assessee was in receipt of certain amounts being reimbursements of actual expenditure incurred. The provision of Section 44BB considers inclusion of all kind of amount paid or payable to the assessee or to any person on his behalf on account of the provision of services or facilities in connection with, or supply of plant and machinery on hire used, or to be used, in the prospecting for, or extraction or production of mineral oils in India. Thus, both the grounds are dismissed. 17. In result, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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