2017 (11) TMI 1775

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..... unts including reimbursements are includible within the amount paid or payable to the assessee for the purpose of taxation under section 44BB of the Act. Therefore, this issue is decided against the assessee and in favour of the Revenue. Applicability of provisions of section 44BB to provision of barge - whether the receipts for activity carried out by appellant for L&T is inextricably linked with exploration, exploitation and production of mineral oil and cannot be held to be taxable as royalty in terms of section 9(1)(vi) of the Act? - HELD THAT:- We find that the issue under consideration is squarely covered in favour of the assessee by the decision of SBS Marine Limited [2015 (3) TMI 147 - ITAT DELHI] wherein it has been that second .....

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..... d with exploration, exploitation and production of mineral oil and cannot be held to be taxable as royalty in terms of section 9(1)(vi) of the Act. 2. The brief facts relating to first ground of appeal are that the assessee received a sum of ₹ 14,51,797/- and did not offer it to tax on the premises that these receipts were in nature of reimbursement of expenditure incurred by the assessee. The AO observed that the reimbursement claimed by the assessee was on account of payments received for material used which is intricately linked with the execution of contract and gross contract receipts. He, therefore, taxed the same u/s. 44BB of the IT Act. The ld. CIT(A) after considering various decisions on the issue, confirmed the action .....

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..... the Act. Reliance was placed on the decision of Hon ble Apex Court in ONGC vs. CIT (civil appeal No. 731 of 2007). The AO was of the opinion that since the assessee had given specialized vehicle/Vessel/equipment on hire to L T, its receipts are taxable as royalty as defined in section 9(1)(vi) of the Act read with Article 12 of India-Portugal DTAA. He, therefore, concluded that the income of the assessee is covered u/s. 9(1)(vi) of the IT Act and therefore, the assessee is not entitled for concessional benefit under section 44BB of the Act. He, therefore, brought the gross revenues amounting to ₹ 34,00,35,436/- received in respect of L T contract to tax as royalty receipt on gross basis taxable @ 10%. The learned CIT(A) after making .....

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