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TMI Blog2024 (2) TMI 636X X X X Extracts X X X X X X X X Extracts X X X X ..... inction between the gross receipts in general and the gross receipts as per the provisions of section 44BB of the Act? 2. Whether on the facts and in the circumstances of the case, the Ld. CIT(A) has erred in ignoring the fact that income under sub-section (1) of section 44BB of the Act is computed 10% of the gross receipts/revenue after taking into consideration as if all expenses from section 30 to 43B of the Income Tax Act are deemed to have been allowed?" 3. Briefly stated, the assessee is a non-resident foreign company incorporated under the laws of Republic of Panama. The assessee is engaged in the business of engineering, procurement, fabrication and installation of offshore oil and gas facilities and is serving customers in oil and energy sector across the world. The assessee has a Project Office situated in Chennai, India. During the relevant AYs the assessee had carried on the scope of work awarded by Oil & Natural Gas Corporation of India (ONGC) under the contract No. EOA/MM/SURF-SPS/KO7NL17002 dated 05.11.2018 for survey (pre-engineering, pre-construction/pre-installation and post installation) design, engineering, procurement, fabrication, load out, tie down sea fas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dgement CIT versus Mitchell Drilling International Pty. Limited 380 ITR 130 is as under: "11. It is in this context that the question arises whether the service tax collected by the Assessee and passed on to the Government from the person to whom it has provided the services can legitimately be considered to form part of the gross receipts for the purposes of computation of the Assessee's 'presumptive income' under Section 44BB of the Act? 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 ate exchequer since it took the stand that the statutory provision creating that liability Don 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 Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Section 80 HHC of the Act was to confer a benefit on profits accruing with reference to export turnover. Therefore, "turnover" was the requirement. "Commission, rent, interest etc. did not involve any turnover." It was concluded that sales tax and excise duty like the aforementioned tools like interest, rent etc. also do not have any element of 'turn over. 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 44BB 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 r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Chapter IV of the Act, Section 44BB(2) is a special provision and requires ten percent of the gross receipts to be treated as income, the amount so determined is nonetheless the presumptive income of the assessee and should be deemed to be its income in terms of Sections 4, 5 and 9 of the Act. The circulars issued by the CBDT does support the submission. urged on behalf of the assessee, that service tax would not form part of the amounts referred to in clauses (a) and (b) of Section 44BB(2) of the Act" 62. Except to state that the said judgment needs re-consideration, no justifiable cause has been shown as to why this Court should take a view different from that of the Delhi High Court, in Mitchell Drilling International (P.) Ltd. (supra), more so when the Division Bench of the Delhi High Court has taken a view similar to that of a Division Bench of this Court in Schlumberger Asia Services Ltd. (supra). As the revenue has not been able to show just cause for this Court to take a different view, we see no reason to differ with the Division Bench judgment of the Delhi High Court that reimbursement of service tax is not an amount paid to the assessee on account of providing services ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hon'ble Delhi High Court in DIT vs. Mitchell Drilling International Pvt. Ltd. supra) and Full Bench decision of the Hon'ble Uttrakhand High Court in DIT vs. Schlumberger Asia Services Ltd. 414 ITR 1. For the sake of ready reference, the operative part of the judgement in the case of DIT vs. Mitchell Drilling International Pvt. Ltd. 380 ITR 130 is reproduced below: "17....that for the purposes of computing the presumptive income of the assessee for the purposes of Section 44BB, the service tax collected by the assessee on the amount paid to it for rendering services was not to be included in the gross receipts in terms of Section 44BB(2) read with Section 44BB(1). The service tax is not an amount paid or payable, or received or deemed to be received by the assessee for the services rendered by it. The assessee only collected the service tax for passing it on to the Government." 8.1. We have also perused the decision of Dehradun Bench of the Tribunal dated 25.11.2021 in DCIT vs. M/s. Transocean Offshore International Ventures Ltd. ITA No. 6174 & 6175/Del/2017 wherein the Tribunal relying on the decisions (supra) in Mitchell Drilling International Pvt. Ltd. and Schlumberger Asia Se ..... X X X X Extracts X X X X X X X X Extracts X X X X
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