OCEANEERING INTERNATIONAL GMBH,MUMBAI vs. DEPUTY COMMISSIONER OF INCOME TAX (IT) 3(2)(2), AIR INDIA BUILDING, MUMBAI

ITA 4670/MUM/2023Status: DisposedITAT Mumbai21 March 2025Bench: SHRI AMIT SHUKLA (Judicial Member), SHRI VIKRAM SINGH YADAV (Accountant Member)27 pages
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What did the Tribunal hold?

The Tribunal held that the final assessment order was not barred by limitation, as ground no. 1 of the assessee's appeal became infructuous after the decision on merits. Regarding the inclusion of GST, the Tribunal ruled in favor of the assessee. It reasoned that Section 44BB is a special code for presumptive taxation and must be read in conjunction with Section 145A, but Section 44BB overrides provisions like Section 28 to 41 and Section 43B. The Tribunal followed the decisions of its Coordinate Benches in Seadrill International Ltd. and Orient Overseas Container Line Ltd., which held that GST, being a statutory levy collected separately as a line item in invoices, cannot be included in gross receipts for computing presumptive income under Section 44BB. Including GST would amount to taxing tax, and it is not in the nature of charges or consideration for services rendered. Therefore, the addition of Rs. 13,10,09,191 towards GST was directed to be deleted. Consequently, grounds 3 and 4 concerning interest and penalty were also rendered infructuous.

What were the facts?

The assessee, Oceaneering International GMBH, a non-resident company, filed its return of income for Assessment Year 2021-22 offering income on a presumptive basis under Section 44BB of the Income Tax Act, 1961. The Assessing Officer (AO) observed that Goods and Services Tax (GST) of Rs. 13,10,09,191 collected by the assessee was not included in the gross receipts. The assessee contended that GST was collected in a fiduciary capacity on behalf of the government and should be excluded. The AO, however, relying on certain decisions, included the GST in the gross receipts. The Dispute Resolution Panel (DRP) confirmed the AO's action. The assessee appealed to the Income Tax Appellate Tribunal (ITAT) against the final assessment order passed by the DCIT, International Taxation, Mumbai, dated 25.10.2023, which was passed under Section 143(3) r.w.s 144C(13) of the Act.

What were the issues?

1. Whether the final assessment order dated 25.10.2023 is barred by limitation under Section 153 of the Income Tax Act, 1961, considering the relevant assessment year is 2021-22. - Assessee's contention: The final assessment order, passed on 23.10.2023, is beyond the 12-month period from the end of AY 2021-22 (i.e., 31 March 2023), making it void ab initio. Relied on the jurisdictional Mumbai High Court decision in Shelf Drilling Ron Tappmeyer Ltd vs ACIT International tax. - Revenue's contention: Not recorded. 2. Whether Goods and Services Tax (GST) should be included in the computation of presumptive income under Section 44BB of the Income Tax Act, 1961. - Assessee's contention: GST of Rs. 13,10,09,191 collected from customers in a fiduciary capacity should be excluded from gross receipts. Relied on its own ITAT orders for previous years and DRP directions, as well as the Uttarakhand High Court judgment in Schlumberger Asia Services Ltd, which relied on the Supreme Court judgment in Sedco Forex. - Revenue's contention: GST forms part of gross receipts for income computation under Section 44BB(1). Relied on the Advance Ruling in Siem Offshore Inc. and a Delhi ITAT decision in DDIT v. Technip Offshore Contracting BV.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 144C(13),Section 153,Section 44BB,Section 145A,Section 234A,Section 234B,Section 234C,Section 270A,Section 43B

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Income Tax Appellate Tribunal, I BENCH MUMBAI

Before: SHRI AMIT SHUKLA & SHRI VIKRAM SINGH YADAV

For Appellant: Shri. Abdul Kadir Jawadwala
For Respondent: Shri. Krishna Kumar, Sr. DR
Hearing: 10/03/2025Pronounced: 21/03/2025

PER VIKRAM SINGH YADAV (A.M):

1.

This is an appeal filed by the assessee against the order passed by the DCIT International Tax Circle 3(2)(2), Mumbai dated 25.10.2023 passed u/s.143(3) r.w.s 144C(13) of the Income Tax Act 1961 (hereinafter referred to as 'the Act') as per the directions dated 22.09.2023 issued by the Dispute Resolution Panel-2, Mumbai (hereinafter referred to as 'the DRP').

2.

Aggrieved assessee has filed present appeal against the impugned order on the following grounds of appeal:

“1. Final Assessment order barred by limitation

1.1.

The Appellant submits that considering th

The order continues below.

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