9911796707
TMI Blog2016 (3) TMI 146X X X X Extracts X X X X X X X X Extracts X X X X ..... receipts of the assessee and all the deductions and exclusions from income are deemed to have been allowed to the assessee." "Whether the Ld. CIT(A) has erred in not appreciating the fact that once the receipts are offered to tax u/s 44BB of the Act which provides for computation of profits on gross basis, there is no scope for computing or re-computing the profits by excluding any element of the receipts from the total turnover as the same would amount to defeating the very purpose of providing for a scheme of simpler mode of computation of profits u/s 44BB of the Act and obviating the need for accounting for individual receipts and payments etc." "Whether the Ld. CIT(A) has erred in ignoring the ratio of the judgment in the case of M/s Chowringhee Sales Bureau (P) Ltd. (82 ITR 542, SC) wherein the Hon'ble Apex Court has held that the Sales Tax collected by an assessee in the ordinary course of its business forms part of its business receipts. Owing to the inherent similarity in the nature if the sales tax and service tax, the ratio of the judgment in the said case is directly applicable in the facts of the instant case." 3. We have heard arguments of both the sides and p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f reimbursement of freight and transportation charges actually incurred in respect of equipment was not includible while computing its income under Section 44BB. The Assessing Officer rejected the claim but the CIT(A) and the Tribunal accepted it. On appeal, the Hon'ble High Court held as under:- "Held, allowing the appeal, that it was not in dispute that the amount had been received by the assessee. Therefore, the Assessing Officer added the said amount which was 4 ITA-504/Del/2013 received by the non-resident company rendering services under the provisions of section 44BB to the ONGC and imposed the income tax thereon. He was justified in doing so." 7. The ratio of the above decision of Hon'ble Jurisdictional High Court would be squarely applicable to the case of the assessee. Respectfully following the same, we reject ground No.3 of the assessee's appeal. 6. At, this juncture it is also relevant to take cognizance of decision of Hon'ble High court of Delhi in the case of DIT Vs Mitchell Drilling International Pvt. Ltd. (supra) wherein there lordship held that the service tax collected by the assessee and passed on to the Government of India from the person to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upra). Mr. Kaushik also referred to the decisions in DIT v. Schlumberger Asia Services Ltd (supra), Sedco Forex International Inc. v. CIT 299 ITR 238 (Uttarakhand) and the decision of this Court in CIT Tax-XI v. M/s DLF Commercial Project Corporation 2015-TIOL- 1609-HC-DEL-IT. 8. Section 44BB (1) and (2) of the Act read as under: "44BB. (1) Notwithstanding anything to the contrary contained in sections 28 to 41 and sections 43 and 43A, in the case of an assessee, being a non-resident, engaged in the business of providing services or facilities in connection with, or supplying plant and machinery on hire used, or to be used, in the prospecting for, or extraction or production of, mineral oils, a sum equal to ten per cent of the aggregate of the amounts specified in sub-section (2) shall be deemed to be the profits and gains of such business chargeable to tax under the head "Profits and gains of business or profession" : Provided that this sub-section shall not apply in a case where the provisions of section 42 or section 44D or section 44DA or section 115A or section 293A apply for the purposes of computing profits or gains or any other income referred to in those sections. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12. In Chowringhee Sales Bureau (supra) sales tax in the sum of Rs. 32,986 was collected and kept by the Assessee in a separate 'sales tax collection account'. The question considered by the Supreme Court was: 'Whether on the facts and in the circumstances of the case the sum of Rs. 32,986/- had been validly excluded from the assessee's business income for the relevant assessment year?". However, there the Assessee did not deposit the amount collected by it as sales tax in the State exchequer since it took the stand that the statutory provision creating that liability upon it was not valid. In the circumstances, the Supreme Court held that the sales tax collected, and not deposited with the treasury, would form part of the Assessee's trading receipt. 13. The decision in George Oakes (P) Ltd. (supra) was concerned with the constitutional validity of the Madras General Sales (Definition of Turnover and Validation of Assessments) Act, 1954 on the ground that the word turnover was defined to include sales tax collected by the dealer on inter- state sales. Upholding the validity of the said statute the Supreme Court held that "the expression 'turnover' mea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 39;'. 15. In CIT v. Lakshmi Machine Works (supra), the Supreme Court approved the decision of the Bombay High Court in CIT v. Sudarshan Chemicals Industries Ltd. (supra) which in turn considered the decision of the Supreme Court in George Oakes (P) Ltd. (supra). In the considered view of the Court, the decision of the Supreme Court in Lakshmi Machines Works (supra) is sufficient to answer the question framed in the present appeal in favour of the Assessee. The service tax collected by the Assessee does not have any element of income and therefore cannot form part of the gross receipts for the purposes of computing the 'presumptive income' of the Assessee under Section 44 BB of the Act. 16. The Court concurs with the decision of the High Court of Uttarakhand in DIT v. Schlumberger Asia Services Ltd (supra) which held that the reimbursement received by the Assessee of the customs duty paid on equipment imported by it for rendering services would not form part of the gross receipts for the purposes of Section 44 BB of the Act. 17. The Court accordingly holds that for the purposes of computing the 'presumptive income' of the assessee for the purposes of Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
