TMI Blog2018 (5) TMI 2139X X X X Extracts X X X X X X X X Extracts X X X X ..... resumptive income - As decided in TRANSOCEAN OFFSHORE DEEPWATER DRILLING INC. C/O. NANGIA AND COMPANY [ 2018 (2) TMI 53 - ITAT DELHI] for the purposes of computing the 'presumptive income' of the assessee for the purposes of Section 44 BB of the Act, the service tax collected by the Assessee on the amount paid is for rendering services is not to be included in the gross receipts in terms of Section 44B (2) read with Section 44 BB (1). The service tax is not and amount paid or payable, or received or deemed to be received by the Assessee for the services rendered by it. The only collecting the service tax for passing it on to the Government. The Court further notes that the position has been made explicit by the CBDT itselfin two of its circulars. In Circular 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 194-I of Income Tax Act would be required to be made on the amount of rent paid/payable without including t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d CIT(A) has erred in not allowing the said appeal as relief has already been granted in the AoP order. 3. The learned CIT(A) failed to deal with any of the grounds of appeal raised in the Appeal memorandum which may kindly be considered as set out herein, the same are not being repeated herein for the sake of brevity, including grounds 1 to 5 therein. 4. At the very outset the counsel for the assessee pointed out that impugned issue stand decided in favour of the assessee and against the revenue by the order of the bench in assessee s own case in ITA No. 5822/Del/2010 and 105/Del/2012 for A. Y. 2008-09. 5. We find force in the contention of the counsel the relevant finding of the coordinate bench reads as under :- 4.5. Thus respectfully following the decision of Hon ble Delhi High Court in the case of Linde AG Linde Engineering Division vs. DDI (supra) we hold that Consortium Agreement dated 04/05/03 between Slumberger Asia Services Ltd and Transocean Offshore Deep water Drilling Pvt. Ltd., do not constitute an AOP. 4.6 From the assessment order it is observed that Ld.AO has taxed the revenue under section 115 A at 10%. Section 1 ISA presupposes the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e on account of the 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 India shall be deemed to be the profits and gains of the chargeable to tax. The purpose of this provision is to tax what can be ultimately considered as income of the Assessee earned. From its business and profession. 10. The expression amount paid or payable in Section 44 BB (2) (a) and the expression 'amount received or deemed to be received' in Section 44BB(2)(b) is qualified by the words 'on account of the provision of services and facilities in connection with, or supply of plant and machinery. Therefore, only such amounts which are paid or payable for the sendees provided by the Assesses can form part of the gross receipts for the purposes of computation of the gross income under Section 44 BB (1) read with Section 44BB(2). 11. It is in this context that the question arises whether the service tax collected by the Assesses and passed on to the Government from the person to whom it has provided the services can legitimately be considered to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sought to interpret the expression 'turnover' was also in another specific context. There the question before the Supreme Court was whether excise duty and sales tax were includible in the 'total turnover' which was the denominator in the formula contained in Section 80 BBC (3) as it stood in the material time? The Supreme Court considered its earlier decision in Chowringhee Sales Bureau (supra) and answered the question in the negative. The Supreme Court noted that for the purposes of computing the 'total turnover' for the purpose of Section 80 BBC (3) brokerage, commission, lid not form part of the business profits because they did not involve any element of export turnover. It was observed: Just as commission received by an assessee is taxable to exports and yet it cannot form part of the turnover' excise duty and sales-tax also cannot form part of the 'turnover'. The object of the legislature in enacting Section 80 HHC of the Act was to confer a benefit on profits accruing with reference to export turnover. Therefore, turnover was the requirement. Commission, rent, interest etc. did not involve any turnover. It was concluded ..... X X X X Extracts X X X X X X X X Extracts X X X X
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