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TMI Blog2012 (7) TMI 250X X X X Extracts X X X X X X X X Extracts X X X X ..... element of profits and a service provider is collecting the same from its customers on behalf of the Government and, accordingly, same cannot be included in the total receipts for determining the presumptive income. See Islamic Republic of Iran Shipping Lines(2011 (4) TMI 637 (Tri)) - Decided against Revenue X X X X Extracts X X X X X X X X Extracts X X X X ..... d-INTL dated February 16, 2009; CIT Vs. M/s B.J. Service Co.,2007-TII-05-HC-Ukhand-Intl dated October 8, 2007; CIT Vs. Trans Ocean Offshore Incorporation,2007-TII-13-HC-Ukhand-Intl dated October 8, 2007; M/s Sedco Forex International Inc. Vs. CIT, 2007-TII-02-HCUkhand- Intl dated September 28, 2007; and CIT Vs. M/s Halliburton Offshore Service Inc.,2007-TII-04-HC-Ukhand-Intl dated September 20, 2007, the AO bought to tax reimbursement of fuel recharge and service tax, aggregating to ₹ 220,331,466/- in terms of provisions of sec. 44BB of the Act vide draft order dated 28.12.2010. 3. Thereafter, the assessee approached DRP and raised a number of objections. After considering the objections of the assessee, the DRP vide their order dated 2nd September, 2011 concluded on the issue of inclusion of reimbursements towards fuel recharge & service tax , as under :- "3. Objection No.3: This objection relates to the proposal to tax the reimbursement of fuel recharge and service tax aggregating to ₹ 22,031,466/- under the provisions of section 44BB. It is submitted that under clause 4.4 of the contract ONGC is required to reimburse the expenditure incurred on actual usage of die ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m part of amount for the purpose of deemed profits u/s 44BB unlike the other amounts received towards reimbursement. Following the view in this decision, Mumbai Bench in their decision dated 20.4.2011 in I.T.A. no.8845/Mum/2010 in the case of Islamic Republic of Iran Shipping Lines Vs. DCIT,2011-TII-77-MUM-INTL, held that service tax being a statutory liability, would not involve any element of profit and a service provider having collected the amount on behalf of the Government, accordingly, the same could not be included in the total receipts for determining the presumptive income, the ld. AR added. On the other hand, the ld. DR supported the findings of the AO. 5. We have heard both the parties and gone through the facts of the case as also the aforesaid decisions relied upon by the ld. AR.. We find that Hon'ble jurisdictional High Court in their aforesaid decision Halliburton Offshore Services Inc. (supra) while adjudicating an identical issue relating to reimbursement of freight & transport charges in respect of equipment, concluded as under:- "5. Sec. 44BB provides that the deemed profits and gains under sub-s. (1) shall be @ 10 per cent of the aggregate amount specified i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... received by the assessee company. Therefore, the AO added the said amount which was received by the non-resident company rendering services as per provisions of s. 44BB to the ONGC and imposed the income-tax thereon. 5.1 In the light of view taken by the Hon'ble jurisdictional High Court in their aforesaid decision, especially when the ld. AR accepted the position that the issue is squarely covered by the aforesaid decision while no other contrary decision was brought to our notice nor the ld. AR placed any material before us, controverting the aforesaid findings of the DRP and the AO, we have no hesitation in upholding the findings of the AO in the light of directions of the DRP in para 3.2 of their order dated 2nd September, 2011 in respect of reimbursement of amount on account of fuel recharge. In view thereof, ground no. 2 in the appeal is dismissed. 6. As regards reimbursement of amount in respect of service tax, as pointed out by by the ld. AR, the ITAT Delhi Bench in their decision in Technip Offshore Contracting BV(supra) concluded that service tax collected by the assessee being directly in connection with services or facilities or supply specified u/s 44BB of the Act pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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