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TMI Blog2024 (1) TMI 652X X X X Extracts X X X X X X X X Extracts X X X X ..... nt paid or payable, or received or deemed to be received by the assessee for the services rendered by it, the assessee is only collecting the service tax for passing it on to the Government account. Thus, the question framed was answered in favour of the assessee and against the revenue. - Shri Sonjoy Sarma, Judicial Member And Shri Girish Agrawal, Accountant Member For the Appellant : Shri Pratyush Jhunjhunwala, Advocate For the Respondent : Shri Abhijit Kundu, CIT ORDER PER BENCH: All these appeals by the assessee are directed against the separate orders of Ld. CIT(A)-22, Kolkata vide 28.02.2023 (for AY 2016-17), 31.03.2023 (for AYs 2017-18 2018-19) and dated 28.02.2023 (for A.Y. 2016-17 arising out of assessment orders passed u/s. 143(3) r.w.s. 144C(3) of the Income-tax Act, 1961 (hereinafter referred to as the Act ) by ACIT (International Taxation), Circle-1(1), Kolkata dated 26.01.2019, 24.01.2020, 10,06,2021 and 26.01.2019 respectively. 2. Shri Pratyush Jhunjhunwala, Advocate appeared on behalf of the assessee. Shri Abhijit Kundu, CIT, DR appeared on behalf of the revenue. 3. In all these four appeals, common issue is raised by the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... At the time of computation of such presumptive income, assessee has considered the receipts from the sale of tickets, excluding the amount of service tax collected from the customers and paid to the Government. It was further submitted that service tax is a statutory levy which is collected by the assessee from its customers for and on behalf of the Central Government on the tickets booked by it. It was submitted that the service tax so collected does not form part of the receipts of the assessee on which income accrues or arises to the assessee as assessee merely acts as a collection agent for and on behalf of the Central Government and after collection, deposits the service tax so collected into the treasury of the Central Government. 5.2 Reliance was also placed by the assessee on several decisions which are listed below: (i) DIT Vs. Mitchell Drilling International Pvt. Ltd. (2016) 380 ITR 130 (Del.) ; ii) Islamic Republic of Iran Shipping Lines Vs. DCIT (2011) 46 SOT 101 (Mum. Trib.); iii) DIT Vs. M/s. Schlumberger Asia Service ltd. (2009) 317 ITR 156 (Uttarkhand HC); iv) Sundowner Offshore International (Bermuda) Ltd. Vs. ADIT (2015) 70 SOT 656 (Delhi Trib.); ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder of the coordinate bench. Ld. CIT, DR affirmed the submission made by the Ld. Counsel to this effect. 7.1. Ld. Counsel further submitted that coordinate bench had considered the decision of Hon ble High Court of Uttarakhand in the case of DIT Vs. Schlumberger Asia Services Ltd. 414 ITR 1, which in turn has been considered by the same Hon ble court in the case of CIT Vs. B. J. Services Co. ME Ltd. in (2022) 145 taxmann.com 430 (Uttarakhand) wherein it was held that reimbursement of service tax cannot be included in aggregate of amounts specified in clauses (a) and (b) of section 44BB(2) as it is not an amount received by assessee on account of services provided by them in prospecting the instruction or production of mineral oils. Revenue had filed SLP before the Hon ble Supreme Court against the judgment in B. J. Services Co. ME Ltd. (supra) which was dismissed vide order dated 30.10.2023 reported in (2023)156 taxmann.com 23 (SC). 7.2. Ld. Counsel further submitted that coordinate bench in assessee s own case for AY 2015-16 had categorically noted in para 9 that the provisions of section 44BB of the Act dealt with by the Hon ble High Court are pari materia to the provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction or production of mineral oils, which alone must be deemed to be the income of the assessee. On a plain and literal reading of clauses (a) and (b) of section 44BB of the Act, it is clear that reimbursement of service tax ought not to be included in the aggregate of the amounts specified in clauses (a) and (b) of section 44BB(2), as it is not an amount received by the assessee on account of services provided by them in the prospecting, extraction or production of mineral oils. 8. Ld. CIT, DR placed reliance on the orders of lower authorities and fairly submitted that the issue is covered by the decision of coordinate bench in assessee s own case for AY 2015-16 which even though is in appeal before the Hon ble High court but no stay has been granted thereon. 9. We have heard the rival submissions and perused the material available on record. Admittedly, it is a fact on record that assessee has collected and deposited service tax component of Rs. 105,33,47,264/- as a service provider. The moot point before us for adjudication is whether this service tax component is includible in the gross receipts for computing the deemed taxable income u/s. 44BBA of the Act. In the prese ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... BA(2)(b) is qualified by the words on account of the carriage of passengers, live stock material or goods from any place in India/outside India . Therefore, in our considered understanding, only such amounts which are paid or payable for the service provided by the assessee can form part of the gross receipts for the purpose of computation of gross total income u/s. 44BBA(1) of the Act. 9.1 We also note and agree with the submission made by the Ld. Counsel for the assessee that service tax collected by the assessee does not have any element of income, it is collected by the assessee from its customers for and on behalf of the Central Government on account of a statutory levy and, therefore, it does not form part of the receipts of the assessee on which income accrues or arises to it. We are in agreement with the contention of the Ld. Counsel for the assessee that assessee merely acts as a collection agent for and on behalf of the Central Government and after collection, deposits the service tax so collected into the treasury of the Central Government. 9.2 On perusal of the decision of Hon ble High Court of Delhi in the case of DCIT Vs. Mitchell Drilling International Pvt. Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act which is before us for consideration. 10. Ld. CIT, DR had referred to the decision of Hon ble Supreme Court in the case of Sedco Forex International Inc. (supra). On perusal of the said decision, we note that Sedco Forex International Inc. (supra) was paid mobilization fees from ONGC which was included by the Ld. AO as part of gross receipts for the purpose of section 44BB. Hon ble Supreme Court has observed that mobilization fees is a fixed amount that might be less or more than the actual expenses incurred and contract in question being indivisible one, held that amount received by the assessee as mobilization fee was to be included in gross receipts for computing the deemed profits u/s. 44BB of the Act. Thus, the facts of this case are distinguishable from the facts in the present case before us since Hon ble Supreme Court dealt with the issue of inclusion of mobilization fees arising out of the commercial terms, in the gross receipts whereas in the present case before us, the issue relates to inclusion of service tax component in the gross receipt which is a statutory levy collected for and on behalf of the Central government by the assessee. Further, Ld. CIT, DR has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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