SUNDOWNER OFFSHORE INTERNATIONAL (BERMUDA) LTD.,NOIDA vs. DCIT (INTERNATIONAL TAXATION), DEHRADUN

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ITA 4112/DEL/2016Status: DisposedITAT Delhi30 April 2019AY 2013-143 pages

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

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that mobilization charges and reimbursement of expenses are includible in gross receipts for the purpose of Section 44BB. This decision was based on a prior ruling by the Tribunal in the assessee's own case for the preceding assessment year, which followed the Supreme Court's decision in Sedco Forex International Incorporation.

What were the facts?

The assessee, Sundowner Offshore International, appealed against the CIT(A)'s order which included mobilization charges and reimbursement of expenses in its gross receipts under Section 44BB. The assessee argued these amounts were not taxable in India as per Section 5 read with Section 9.

What were the issues?

Whether mobilization charges and reimbursement of expenses received by the assessee are includible in gross receipts for taxation under Section 44BB of the Income Tax Act, 1961.

Which sections of the Income-tax Act were involved?

Section 44BB,Section 5,Section 9

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH : G : NEW DELHI

Before: SHRI R.K. PANDA & MS SUCHITRA KAMBLE

For Appellant: Shri Vishal Misra &, Shri Amit Arora, CA
For Respondent: Shri N.K. Bansal, Sr. DR
Hearing: 30.04.2019Pronounced: 30.04.2019

BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER AND MS SUCHITRA KAMBLE, JUDICIAL MEMBER Assessment Year: 2013-14 Sundowner Offshore International Vs DCIT (International Taxation), (Bermuda) Ltd., Circle-2, Income Tax Office, C/o Nangia & Company, Subhash Road, A-109, Sector-136, Dehradun. Noida. PAN: AAHCS0550M (Appellant) (Respondent) Assessee by : Shri Vishal Misra & Shri Amit Arora, CA Revenue by : Shri N.K. Bansal, Sr. DR Date of Hearing : 30.04.2019 Date of Pronouncement : 30.04.2019 ORDER

PER R.K. PANDA, AM:

1.

This appeal filed by the assessee is directed against the order dated 31st May, 2016 of the CIT(A)-2, Noida, relating to assessment year 2013-14.

2.

The grounds of appeal raised by the assessee are as under:- “Based on the facts and circumstances of the case, your appellant respectfully submits the following grounds which are without prejudice to each other:

Ground No. 1 That the Ld.CIT(A) has erred on facts and in law in affirming the action of the A.O. in holding that the amount aggregating to INR. 30,340,965/- being the proportionate amount received by the appellant for mobilization of the rig outside Indian territorial waters is to be included in the gross receipts u/s 44BB of the Income Tax Act, 1961 as opposed to the claim of the appellant that the same does not constitute income chargeable to tax in India as per section 5 read with section 9 of the Income-tax Act, 1961. Ground No. 2 That the Ld.CIT(A) has erred on facts and in law in affirming the action of the A.O in holding that the receipts on account of reimbursements of expenses amounting to INR 2,481,281/- were includible in the gross receipts for the purpose of determination of income under section 44BB of the Income Tax Act, 1961 as opposed to the claim of the appellant that the same cannot give rise to income for taxation purposes Your appellant prays that the erroneous order be cancelled and appropriate relief may be granted to the appellant. Your appellant craves leave to add to, alter, amend, vary, omit, substitute or delete any of the aforementioned grounds of appeal or add a new ground or grounds of appeal at any time the time of hearing of the appeal.”

3.

The ld. counsel for the assessee, at the outset, referring to the order of the Tribunal in assessee’s own case for assessment year 2012-13 vide order dated 27.11.2017, submitted that both the grounds have been decided against the assessee by the Tribunal.

4.

We have heard the rival arguments made by both the sides and observe that the Tribunal in assessee’s own case in the immediately preceding assessment year has decided both the issues by observing as under:-

“5. We have carefully considered the rival contentions and also perused the orders of the lower authorities. The above two issues in the appeal of the assessee are squarely covered against the assessee by the decision of the Hon'ble Supreme

Court in case of Sedco Forex International Incorporation (supra) wherein it has been held that: a. That mobilization charges are to be included in gross receipts for the purpose of provisions of section 44BB of the Income Tax Act, 1961 b. The reimbursement charges are to be included in gross receipts for the purpose of provisions of section 44BB of the income Tax Act, 1961 6. Therefore, the appeal of the assessee with respect to both these above issues are covered against the assessee. Hence, ground No. I and 2 of the appeal are dismissed.”

5.

In view of the decision of the Tribunal in assessee’s own case for the immediately preceding assessment year , both the grounds raised by the assessee are dismissed.

6.

In the result, the appeal filed by the assessee is dismissed.

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