2018 (9) TMI 2119 - AT - Income Tax

Income taxable in India - Receipts from Offshore Supply Contracts - whether amounts received by the appellant company from the Offshore Supply Contracts are covered by the provisions of section 44BBB and consequently liable to tax in India? - HELD THAT - Considering decisions of assessee s own case in the earlier years from A.Y. 2007-08 to A.Y. 2013-14 we observe that identical issue was decided by the co-ordinate benches of the Tribunal in favour of the assessee by holding that amount received for supply of material and equipment under offshore supply contract is to be excluded from gross receipt for computing income under section 44BBB. Operative part of the decision 2017 (9) TMI 1999 - ITAT MUMBAI as decided the issue in favour of the assessee by holding that the amount received by the assessee from supply of material and equipment under offshore supply contracts would not form part of the business receipts for the purpose of section 44BBB of the Act. Decided in favour of assessee.

Summary

Issues Involved:
Taxability of amount received under offshore supply contracts in India for assessment years 2012-13 & 2014-15.

Detailed Analysis:

Issue 1: Taxability of amount received under offshore supply contracts
The assessee challenged the order of the DRP holding that the amount received from offshore supply contracts was taxable in India under section 44BBB of the Act. The assessee argued that the issue had been decided in their favor in earlier years by the Tribunal. The DRP upheld the taxing of the amount received from offshore supply contracts. The Tribunal reviewed the decisions of the co-ordinate benches in the assessee's earlier cases and found that the issue had been consistently decided in favor of the assessee. The Tribunal referred to specific cases and concluded that the amount received for the supply of material and equipment under offshore supply contracts should be excluded from gross receipts for computing income under section 44BBB of the Act. Therefore, the Tribunal decided the issue in favor of the assessee based on the precedent set by earlier decisions.

Issue 2: Jurisdiction of the AO under section 147
The legal issue raised by the assessee challenging the jurisdiction of the AO under section 147 was rendered academic as the Tribunal had already decided the main issue on merit in favor of the assessee. As a result, the jurisdictional issue was not adjudicated upon by the Tribunal.

Judgment Summary:
The Appellate Tribunal, in the case involving assessment years 2012-13 & 2014-15, allowed the appeals of the assessee regarding the taxability of the amount received under offshore supply contracts in India. The Tribunal relied on earlier decisions in the assessee's favor and held that the amount received for the supply of material and equipment under offshore supply contracts should be excluded from gross receipts for computing income under section 44BBB of the Act. The Tribunal also noted that the jurisdictional issue challenging the AO under section 147 was not addressed due to the favorable decision on the main issue. Therefore, the appeals of the assessee were allowed, and the orders were pronounced in favor of the assessee.