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Cathay Pacific Airways Ltd. , Kolkata vs Acit, Cir-1(1), It,Kol, Kolkata on 9 January, 2024 cites

Sedco Forex International Inc. Thr. Its ... vs Commissioner Of Income Tax Meerut on 30 October, 2017

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 contended that deduction of expenses is not available from the receipts u/s. 44BBA which in 10 ITA Nos. 420/Kol/2023 & ITA Nos. 466 & 467/Kol/2023 Cathay Pacific Airways Ltd., A.Y: 2016-17 to 2018-19 & ITA No. 419/Kol/2023 Hong Kong Dragon Airlines Ltd., AY 2016-17 our considered understanding is not tenable since assessee has not claimed service tax component as an expenses deduction.
Supreme Court of India Cites 50 - Cited by 41 - A K Sikri - Full Document

M/S. Chowringhee Sales Bureau (P) Ltd vs C.I.T., West Bengal on 10 October, 1972

9.3 While answering the above substantial question of law, Hon'ble High Court considered various decisions including the decision of Hon'ble Supreme Court in the case of Chowringhee Sales Bureau Pvt. Ltd. Vs. CIT (1973) 87 ITR 592 (SC), CIT Vs. Lakshmi Machine Works (2007) 290 ITR 667 (SC), DIT Vs. Schlumberger Asia Services Ltd. (2009) 317 ITR 156 (Uttarakhand) and Sedco Forex International Inc. Vs. CIT (2008) 299 ITR 238 (Uttarakhand). The Hon'ble High Court also referred to the Circular issued by CBDT vide Circular No. 4/2008 dated 28.04.2008 and Circular No. 1/2014 dated 13.01.2014 wherein CBDT clarified that service tax paid by the tenant does not partake the nature of 'income' of the landlord. The landlords only acts as a collecting agency for the Government for collection of service tax and, therefore, CBDT decided that tax deduction at source u/s. 194 of the Act will be required to be done without including the service tax. Similar stand was taken by the CBDT in Circular No. 1/2014 where it was clarified that service tax is not to be included in the fees for professional services or technical services and no TDS is required to be made on the service tax component. Accordingly, in the conclusion, Hon'ble High Court held that for the purpose of computing the presumptive income of the assessee u/s. 44BB, service tax collected by the assessee on the amount paid to it for rendering the services is not to be included in the gross receipts in terms of section 44BB(2) read with section 44BB(1) of the Act. Hon'ble High Court also held that 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 account. Thus, the question framed was answered in favour of the assessee and against the revenue.
Supreme Court of India Cites 12 - Cited by 319 - H R Khanna - Full Document

Commissioner Of Income Tax, Coimbatore vs M/S. Lakshmi Machine Works on 25 April, 2007

9.3 While answering the above substantial question of law, Hon'ble High Court considered various decisions including the decision of Hon'ble Supreme Court in the case of Chowringhee Sales Bureau Pvt. Ltd. Vs. CIT (1973) 87 ITR 592 (SC), CIT Vs. Lakshmi Machine Works (2007) 290 ITR 667 (SC), DIT Vs. Schlumberger Asia Services Ltd. (2009) 317 ITR 156 (Uttarakhand) and Sedco Forex International Inc. Vs. CIT (2008) 299 ITR 238 (Uttarakhand). The Hon'ble High Court also referred to the Circular issued by CBDT vide Circular No. 4/2008 dated 28.04.2008 and Circular No. 1/2014 dated 13.01.2014 wherein CBDT clarified that service tax paid by the tenant does not partake the nature of 'income' of the landlord. The landlords only acts as a collecting agency for the Government for collection of service tax and, therefore, CBDT decided that tax deduction at source u/s. 194 of the Act will be required to be done without including the service tax. Similar stand was taken by the CBDT in Circular No. 1/2014 where it was clarified that service tax is not to be included in the fees for professional services or technical services and no TDS is required to be made on the service tax component. Accordingly, in the conclusion, Hon'ble High Court held that for the purpose of computing the presumptive income of the assessee u/s. 44BB, service tax collected by the assessee on the amount paid to it for rendering the services is not to be included in the gross receipts in terms of section 44BB(2) read with section 44BB(1) of the Act. Hon'ble High Court also held that 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 account. Thus, the question framed was answered in favour of the assessee and against the revenue.
Supreme Court of India Cites 26 - Cited by 324 - Full Document
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