TMI Blog2020 (1) TMI 1364X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee vis-a-vis the revenues converted as on the date on which the foreign currency payments are made by the payee. We have noted that learned CIT(A) has any way remitted the matter could be filed of the assessing officer for verification of the applicable TT Buying Rate under rule 115(1). We therefore see no infirmity in the order of the learned CIT(A) and declined to interfere the matter. Service tax should be excluded from gross receipts for the purpose of computation of income u/s. 44BB - HELD THAT:- ITAT Mumbai Bench in the case of M/s. Weatherford Drilling Vs. DCIT [ 2018 (6) TMI 1526 - ITAT MUMBAI ] in which it has been clearly held that the service tax is not liable to be include in gross receipt in terms of Section 44BB ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessing Officer noticed that there was a difference in the revenues offered to tax and the revenues as per 26AS. In response to assessing officer show cause notice as to why the difference of ₹ 9,29,66,745/- not be brought to tax it was explained by the assessee that the revenues reported in the computation of income were converted into INR from USD by applying the Rule 115 of the Income Tax Rules 1962, which requires the conversion being made at the telegraphic transfer buying rate (TT Buying Rate) as on the date on which tax was required to be deducted at source, whereas the figures in 26AS reflect the conversion as on the date of payment. The assessing officer however was not satisfied with the said explanation, and therefore, pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s determined. There is variance between the manner conversion rate for exchange is to be adopted in determination of income and determination of tax deduction at source. When rule provides as to how income is to be computed then that has to prevail since accurate computation of income is a primary requirement and tax deducted at source is to be set off against tax due on the income. Hence I hold that the Assessing Officer has to adopted correct procedure for currency conversion being on based one explanation (2)(c) to rule 115(1). 7. Having fixed manner of conversion of currency, since AO has mentioned that exchange rate as per TTBR specified in Rule 115 is not substantiated, the AO may verify the same and if rates applied is not corre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the section is aggregate of the amounts and aggregate intends combined or collective and also the fact that an appeal has been admitted by the jurisdictional High Court on the similar grounds in the case of Hanjin Shipping Co. Ltd. 10. The learned Representative fairly agreed that this issue is covered in favour of the assessee by a decision of the coordinate bench in assessee s own case for the assessment year 2015-16. While doing so coordinate bench has inter alia observed as follows:- 4. We have heard the argument advanced by the Ld. Representative of the parties and perused the record. The Ld. Representative of the revenue has argued that the service tax was wrongly excluded from the gross receipt for the purpose of comput ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... doubt, the law relied by the Ld. Representative of the revenue speaks that the service tax is the part and parcel of the profit, therefore, the same was subject to presumptive profit and gain u/s 44BB of the Act. The issue has been considered by Hon ble Delhi High Court in the case of Mitchell Drilling International (supra), Subsequently, by ITAT Mumbai Bench in the case of M/s. Weatherford Drilling Vs. DCIT in which it has been clearly held that the service tax is not liable to be include in gross receipt in terms of Section 44BB(1) r.w. Section 44BB(2) of the Act because the same is not part of the gross receipt for the purpose of depositing the presumptive tax. Taking into account all the facts and circumstances, we are of the view that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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