DCIT (INTERNATIONAL TAXATION), DEHRADUN vs. M/S. SMITH INTERNATIONAL INC., DEHRADUN

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ITA 4077/DEL/2016Status: DisposedITAT Dehradun18 May 2021AY 2012-132 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that Service Tax reimbursements are not includible in the aggregate amount referred to in Section 44BB(2). The Tribunal also noted that the appeal had a low tax effect.

What were the facts?

The assessee declared a total income of Rs. 7,87,01,991, while the Assessing Officer computed it as Rs. 8,54,75,129. The primary issue was whether Service Tax receipts are includible in gross revenue for Section 44BB. The appeal was filed by the Department.

What were the issues?

Whether Service Tax receipts are includible in gross revenue for the purpose of Section 44BB of the Income Tax Act, 1961. Whether the appeal is maintainable due to low tax effect.

Which sections of the Income-tax Act were involved?

Section 44BB

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, [ DEHRADUN CIRCUIT BENCH: DEHRADUN ]

Before: SHRI SUDHANSHU SRIVASTAVASHRI PRASHANT MAHARISHI

For Appellant: Shri Sanjay Shukla
For Respondent: Shri Thakur Singh Mapwal, Shri Sanjay Shukla
Hearing: 5/03/2021Pronounced: 15/05/2021

O R D E R PER PRASHANT MAHARISHI, A. M.

1.

This appeal is filed by the Dy. Commissioner of Income Tax (International Taxation) Circle-2, Dehradun, for assessment year 2012-13, raising several grounds of appeal.

2.

The total income declared by the assessee in the return of income is Rs.7,87,01,991/- and total income computed by the Assessing Officer is Rs.8,54,75,129/-. The tax computed on income of the assessee is @ 42%. On appeal before the ld. CIT (Appeals) the appeal of the assessee was partly allowed. Thus, considering the fact that assessee in its return of income has admitted that there is a permanent establishment in India the tax involved in the above appeal is not above the prescribed tax effect for filing appeal before the Tribunal by the Revenue. Thus, as such, the appeal of the ld. Assessing Officer is subject to dismissal as low tax effect appeal.

Anyway, the only issue involved in this appeal is that whether the receipt on account of Service Tax is includible in gross revenue for the purpose of Section 44BB of the Income Tax Act, 1961 (the Act).

3.

The ld. AR, at the time of hearing, submitted that the appeal of the Revenue is liable to be dismissed on account of low tax appeal.

4.

The ld. DR looking at the figure of the returned income and the assessed income agreed with the same.

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