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TMI Blog2013 (10) TMI 742X X X X Extracts X X X X X X X X Extracts X X X X ..... 2008-09 which is directed against the order of the Assessing Officer namely Assistant Director of Income Tax (International Taxation)4(2) Mumbai dated 23.12.2011 passed under section 143 read with section 147 and 144C, involve some common issues and the same therefore have been heard together and are being disposed of by this single consolidates order. 2. The main issue involved in these appeals as raised in ground No.1 of the Assessee's appeal for AY 2007-08 and in ground No.2 of Assessees Appeal for AY 2008-09 is whether the Service Tax collected by the Assessee Company from the customers should be considered as part of its gross receipts for the purpose of computing the total income as per the provisions of section 44B of the Income Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itted on behalf of the assessee that the service tax represented collection made by it on behalf of the Central Government and since there was no profit element involved in the service tax as the entire amount collected was remitted to the Government, the amount of service tax could not be included in the gross receipts for applying the net profit at the rate of 7.5% in order to determine its total income chargeable in the Tax in India as per the provisions of section 44B. Reliance in support of this contention was placed by the Assessee on the decision of Hon'ble Uttaranchal High Court in the case of DIT, International Taxation v. Schlumberger Asia Services Ltd. [2009] 317 ITR 156. This contention of the assessee was not found acceptable b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e as per the provisions of section 44BB. Accordingly relying on the said decisions of the Hon'ble Uttarakhand High Court, the AO included the amount of the service tax collected by the Assessee in both the years under consideration in the gross receipts for the purpose of computing the income of the assessee at the rate of 7.5% in accordance with the provisions of section 44B. 4. The Learned Counsel for the Assessee submitted before us that this issue involved in the appeals of the Assessee is squarely covered in favour of the Assessee by the decision of Hon'ble Uttaranchal High Court in the case of Schlumberger ASIA Service Ltd. (supra) wherein the earlier decisions of the Court in the case of Sedco Forex International Inc.(supra) and Tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; 2. CIT Vs. Halliburton Offshore Services Inc. 169 Taxman 138 (Uttarakhand) 3. Sedco Forex International Vs. CIT (170) Taxman 459 (Uttarakhand), 4. Trans Ocean Offshore Inc. (supra) 6. We have considered the rival submissions and also perused the relevant material on record. We have also carefully gone through the various judicial pronouncement relied upon by the Ld. Representatives of both the sides in support of their respective stands on the issue. It is observed that the Assessing Office in his impugned orders and Ld. DR at the time of hearing before us have heavily relied on the decision of Hon'ble Uttaranchal High Court in the cases of Halliburton Offshore Services Inc. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmining presumptive profit of 10% under section 44BB. It is observed that the said decision of Delhi Bench of ITAT in the case of Technip Offshore Contracting B.V. (supra) was relied upon by the Revenue in support of its case on the similar issue in the Case of Islamic Republic of Iran Shipping Lines (supra) before Mumbai Bench of ITAT and relying on the decision of the Hon'ble Bombay High Court in the case Sudarshan Chemical Industries 242 ITR 769 and that of Hon'ble Uttarakhand High Court in the case of Schlumberger Asia Service Ltd. (supra) it was held by the Mumbai benches that the service tax, which is a statutory liability, would not involve any element of profits and since the service provider has collected the same from its customer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 234C. As regards the levy interest under section 234B, the assessee in the present case is admittedly a Non Resident in India and its entire income is liable for deduction of Tax at source. As held by the Hon'ble Bombay High Court in the case of DIT (International Taxation) v. NGC Network Asia LLC [2009] 313 ITR 187 (Bom.), when a duty is cast upon payer to pay tax at source, on its failure to do so, no interest can be imposed upon payee Assessee under section 234B. Respectively following the decision of Hon'ble Jurisdictional High Court, we hold that interest under section 234B cannot be imposed on the Assessee on failure of payer to deduct tax at source from the payments made to the Assessee. Moreover the issues relating to levy of under ..... X X X X Extracts X X X X X X X X Extracts X X X X
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