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TMI Blog2012 (6) TMI 547X X X X Extracts X X X X X X X X Extracts X X X X ..... an assessee coming under that provision. If an exercise is to be conducted in each assessee's case to ascertain the liability of taxation, then the very purpose of the section will be defeated. hence, there was no two views possible on this issue and the Assessing Officer has committed a mistake which has rendered the order erroneous and prejudicial to the interest of revenue. Further, DIT has rightly held that provisions of sections 197 and 195 are interim and provisional proceedings in nature. These are only for the purpose of making withholding taxes. The real taxability of the receipts or any sum on which the tax has been deducted can be determined only in regular assessment proceedings. DIT has not substituted his own view to the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Inc . [2008] 300 ITR 265/169 Taxman 138. In respect of the receipts relating to material supplied imported from outside India, the Assessing Officer held that assessee is having a permanent establishment in India. Material supplies imported from outside India and title over the goods passed on toe the purchaser outside India. The goods are sold on account of permanent establishment in India, hence brought to tax at the deemed profit rate of 2% in view of the provisions of section 9(1)(i) of the Act. Assessment was finalized on 24.12.2008. Director of Income-tax (International Taxation) passed an order u/s 263 of I.T. Act by cancelling the order to make afresh assessment. 3. The assessee has come on appeal before us by taking the follow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ofits from the offshore supplies was to be computed by applying a profit rate of 10 per cent as against 2 per cent as done by the Assessing Officer at the time of framing the assessment. Ground no. 5 That on the facts and circumstances of the case and in law the DI erred in holding that the assessment order dated 24.12.2008 passed under section 143(3) of the Act was erroneous and prejudicial to the interest of Revenue and in directing the Assessing Officer to modify the same, by holding that the revenue from M/s Dolphin Drilling Limited M/s Schlumberger Asia Services should have been taxed as fees for technical services under section 9(1)(vii) and not under section 44BB as done by the assessing officer at the time of framing the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he interest of revenue. The assessee has also challenged that the DIT was not justified in holding that the revenue from M/s. Dolphin Drilling Limited M/s. Schlumberger Asia Services should have been taxed as fee for technical services under the provisions of section 9(1)(vii) of the Act and not under section 44BB as done by the Assessing Officer. The order of the DIT also challenged on the issue that when two views are possible then DIT has no jurisdiction u/s 263 of the Act to set aside the view taken by Assessing Officer. Finally, assessee has prayed that for invoking the provisions of section 263 of the Act, two conditions, i.e. one order should be erroneous and second it should be prejudicial to the interest of revenue were not speci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... recalculation of the amount shown as payable in the contract. The very objection of introducing the fiction of income u/s 44BB is to avoid all complications in determining the liability of an assessee coming under that provision. If an exercise is to be conducted in each assessee's case to ascertain the liability of taxation, then the very purpose of the section will be defeated. In our considered view, no such exercise is warranted or permissible in the scheme of section 44BB of the Act. In our considered view, there was no two views possible on this issue and the Assessing Officer has committed a mistake which has rendered the order erroneous and prejudicial to the interest of revenue. We are also in agreement with the DIT that provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X
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