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2014 (2) TMI 37 - AT - Income TaxPresumptive determination u/s 44BB of the Act - Reimbursement of actual expenses Expenses incurred on behalf of customers to be included in gross receipts u/s 44BB of the Act or not Held that - The decision in Commissioner of Income Tax Vs. Halliburton Offshore Services Inc. 2007 (9) TMI 230 - UTTARAKHAND HIGH COURT followed - all the amounts either paid or payable (whether in India or outside India) or received or deemed to be received (whether in India or outside India) are mutually inclusive - This amount is the basis of determination of deemed profits and gains of the assessee @ 10 per cent - The scheme of presumptive determination u/s 44BB of the Act has been considered and the section is a complete code in itself and provides for taxation of all receipts whether arising in India or outside - Thus, for the purpose of presumptive determination of assessee s profits, quantum of amount received by it from its customers against its reimbursement of fuel and material recharge, which are intricately linked to the services were rendered by the assessee and incurred by it, has to be considered as a part of the receipt for the purposes of computation of income u/s 44B of the Act Decided against Assessee.
Issues involved:
1. Inclusion of amounts received by the appellant from customers as reimbursement of actual expenses in gross receipts under section 44BB of the Income Tax Act, 1961. Comprehensive Analysis: The appeal was filed against the order of the Commissioner of Income Tax(A)-II, Dehradun, regarding the inclusion of amounts received by the appellant from customers as reimbursement of actual expenses in gross receipts under section 44BB of the Income Tax Act, 1961 for AY 2009-10. The appellant contended that the Commissioner erred in affirming the action of the Assessing Officer (AO) in including the said amounts in the gross receipts. The issue had been previously decided in favor of the Revenue in the appellant's own case for AY 2008-09. The AO treated the reimbursements as part of the taxable gross receipts towards fee for technical services, following various decisions including the decision of the Uttarakhand High Court in the case of Halliburton Offshore Services Inc. The Dispute Resolution Panel (DRP) held that the reimbursements were to be taxed at the rate of 10% of the gross receipts under section 44BB. The AO finalized the assessment based on the DRP's directions. The appellant approached the ITAT against the findings of the AO in light of the DRP's directions. Both parties agreed that the issue was covered by the decision of the Jurisdictional High Court in the case of Commissioner of Income Tax vs. Halliburton Offshore Services Inc. The ITAT analyzed section 44BB and concluded that all amounts paid or received, whether in India or outside, were mutually inclusive for determining deemed profits and gains at 10%. The ITAT upheld the findings of the AO and DRP, dismissing the appeal of the assessee. The appellant's representative mentioned an appeal before the Jurisdictional High Court of Uttarakhand but acknowledged the authority of the ITAT's decision until modified by a higher appellate forum. The ITAT held that the case was covered by a previous judgment and decided against the appellant based on the provisions of section 44BB and relevant court decisions. In conclusion, the ITAT upheld the inclusion of amounts received by the appellant from customers as reimbursement of actual expenses in gross receipts under section 44BB of the Income Tax Act, 1961, based on the legal provisions and precedents cited during the proceedings. The appellant's appeal was dismissed, affirming the decision of the AO and DRP.
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