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TMI Blog2015 (2) TMI 106X X X X Extracts X X X X X X X X Extracts X X X X ..... w Delhi dated 10.12.2012 in Appeal No. 118/11-12 for AY 2009-10. 2. The sole ground raised by the revenue reads as under:- 1.On the facts and in the circumstances of the case, the Ld. CTT (A) has erred in holding that service tax being a statutory liability, would not involve any element of service in terms of section 44BB and accordingly, the same could not be included in the total receipts for determining the presumptive income ignoring thereby provisions of section 44BB of the Act which provides for computation of the taxable income at a fixed percentage of the 'gross receipts' and also ignoring the fact the section 44BB being beneficial provision in itself, it does not envisage any further concessions to the assessee. 3. Briefly stated, the facts giving rise to this appeal are that the assessee company has been incorporated in Australia and is engaged in the business of providing equipment on hiring and manpower etc. for exploration and production of mineral oil and natural gas. During the year under appeal, the assessee earned gross receipt of ₹ 21,05,89,855 from various clients and offered a total income of ₹ 2,12,90,261 in its return of income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... being directly in connection with services or facilities or supply specified u/s 44BB of the Act provided by the assessee to ONGC, have to be included in the total receipts for the purpose of determination of presumptive profit u/s 44BB, subsequently, Hon ble Uttarakhand High Court decision dated 24th July, 2009 in the case of DIT Anr. Vs. Schlumberger Asia Services Ltd. ,317 ITR 156(Uttarakhand) concluded that reimbursement of custom duty paid by the assessee could not form 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-TOII-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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income and deemed income. Sec. 4 is the charging section of the IT Act and definition as well as the incomes referred in ss. 5 and 9 are for the purpose of imposing the income-tax under s. 143 (3). Sec.44BB is a complete code in itself. It provides by a legal fiction to be the profits and gains of the non-resident assessee engaged in the business of oil exploration @ 10 per cent of the aggregate amount specified in sub-s. (2). It is not in dispute that the amount has been received by the assessee company. Therefore, the AO added the said amount which was received by the nonresident 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 date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paid by the assessee could not form 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 in Islamic Republic of Iran Shipping Lines(supra)held that service tax being a statutory liability, would not involve any element of profit and accordingly, the same could not be included in the total receipts for determining the presumptive income. In the light of view taken by the Mumbai Bench, especially when the ld. DR did not place any material before us, controverting the aforesaid findings of the ld. CIT(A) so as to enable us to take a different view in the matter nor brought to our notice any contrary decision, we are of the opinion that service tax paid by the assessee could not form part of amount for the purpose of deemed profits u/s 44BB unlike the other amounts received towards reimbursement . 9. Since this issue is covered by earlier decision of ITAT, G Bench, Delhi, which is on similar point and no contrary or any higher courts precedent has been cited, therefore, while following the said decision, we uphold the order of Ld.CIT(A) and dismis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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