Bombay High Court
The Commissioner Of Income ... vs Boskalis International- Dredging ... on 25 March, 2019
Bench: Akil Kureshi, Sarang V. Kotwal
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
INCOME TAX APPEAL NO.55 OF 2017
Pr. Commissioner of Income Tax, ]
International Taxation-1, Mumbai. ] ... Appellant
Versus
Boskalis International-Dredging ]
International CV. ] ... Respondent
Mr. Charanjeet Chanderpal for Appellant.
Mr. Madhur Agrawal a/w Mr. Rajesh Poojary i/b Mint & Conferers for
Respondent.
CORAM :- AKIL KURESHI &
SARANG V. KOTWAL, JJ.
DATE :- 25 MARCH, 2019 P. C. :-
1. This Appeal is filed by the Revenue challenging the Judgment of the Income Tax Appellate Tribunal. The following question has been presented for our consideration :
"Whether on the facts and in the circumstances of the case and in law, the Hon'ble ITAT has erred in excluding service tax from the amount paid or payable to the assessee on account of provisions of services and facilities in connection URS 1 of 4 ::: Uploaded on - 26/03/2019 ::: Downloaded on - 27/03/2019 00:48:34 :::
2 24-ITXA 55-17.odt with or supply of plant and machinery on hire used, or to be used, in the prospecting for, or extraction or production of, mineral oils in India for the purpose of determining presumptive profit u/s 44BB of the Act ?"
2. The Respondent - Assessee is engaged in the business of dredging for oil and gas extraction. The question relates to the Assessment Year 2009-2010 and revolves around the interpretation of Section 44BB of the Income Tax Act, 1962 ('the Act', for short). The Revenue contends that while computing the Assessee's income in terms of Section 44BB of the Act, the service tax component would form part of the Assessee's income. The Tribunal relied upon and referred to the decision of this Court in the case of CIT Vs. Sudershan Chemicals Industries Limited1 and on the decision of Uttarakhand High Court in the case of Director of Income-tax, International Taxation, Delhi-II Vs. Schlumberger Asia Services Ltd. 2 and held that service tax component cannot form part of the Assessee's income.
1 245 ITR 769
2 317 ITR 156
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3. Learned Counsel for the Assessee drew our attention to a decision of the Delhi High Court in the case of Director of Income- tax-I Vs. Mitchell Drilling International (P.) Ltd. 3 in which identical issue had come up for consideration. The High Court referred to the decision of this Court in the case of Sudershan Chemicals Industries Limited (supra) which was approved by the Supreme Court in case of CIT Vs. Lakshmi Machine Works4 and also on the decision in the case of Schlumberger Asia Services Ltd. (supra) and held as under :
"In Lakshmi Machine Works (supra), the Supreme Court approved the decision of the Bombay High Court in 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.
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 44BB of the Act.
3 [2015] 62 taxmann.com 24 (Delhi) 4 [2007] 290 ITR 667 URS 3 of 4 ::: Uploaded on - 26/03/2019 ::: Downloaded on - 27/03/2019 00:48:34 ::: 4 24-ITXA 55-17.odt The Court accordingly holds that for the purposes of computing the 'presumptive income' of the Assessee for the purposes of Section 44BB of the Act, the service tax collected by the Assessee on the amount paid to it for rendering services is not to be included in the gross receipts in terms of Section 44BB(2) read with 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 is only collecting the service tax for passing it on to the government."
4. We are in respectful agreement with this view expressed by the Delhi High Court in which identical question had arisen.
5. In the result, Income Tax Appeal is dismissed.
(SARANG V. KOTWAL, J.) (AKIL KURESHI, J.)
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