2010 (10) TMI 975 - AT - Income Tax

Summary

Issues:
Inclusion of reimbursement revenue and mobilization of rig amount in total income under Section 44BB of the Income Tax Act.

Analysis:
The appeal concerned the inclusion of reimbursement revenue and mobilization of rig amount in the total income under Section 44BB of the Income Tax Act for charging tax. The assessee, a non-resident company engaged in exploration and production in India, contested the inclusion of &8377; 2,24,21,980/- as reimbursement revenue and &8377; 5,35,40,616/- as mobilization revenue in the total amount under Section 44BB. The Assessing Officer had included both amounts in the total receipt, which the assessee challenged before the CIT(A) (Commissioner of Income Tax - Appeals).

The CIT(A) relied on the decision of the Hon'ble Uttarakhand High Court in the case of CIT Vs. Halliburton Offshore Services Inc. and rejected the assessee's contentions. The CIT(A) held that both the reimbursement revenue and mobilization revenue were includible in the total receipt for tax levy at 10% under Section 44BB. The assessee, in response, mentioned that the matter was under litigation in the Hon'ble Supreme Court but acknowledged that the jurisdictional High Court's decision applied for the time being.

During the appeal before the ITAT Delhi, the counsel for the assessee failed to challenge the CIT(A)'s findings or present any contradictory decision from the Hon'ble Supreme Court. The counsel mentioned the pending issue in the Supreme Court but did not provide any new evidence. Consequently, the ITAT Delhi upheld the CIT(A)'s decision, stating that the appeal lacked merit as the CIT(A) correctly relied on the decision of the jurisdictional High Court. Therefore, the ITAT Delhi dismissed the appeal of the assessee, affirming the inclusion of both reimbursement revenue and mobilization revenue in the total income under Section 44BB.

In conclusion, the ITAT Delhi's judgment upheld the inclusion of reimbursement revenue and mobilization of rig amount in the total income under Section 44BB of the Income Tax Act based on the decision of the jurisdictional High Court, despite the pending issue in the Hon'ble Supreme Court.