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

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ITA 972/DEL/2016Status: DisposedITAT Delhi27 November 2017AY 2012-132 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 charges are includible in gross receipts for the purpose of Section 44BB. This decision was based on the Supreme Court's ruling in the case of Sedco Forex International Incorporation.

What were the facts?

The assessee, engaged in mineral oil exploration, offered income under Section 44BB. The Assessing Officer included mobilization advance and reimbursement of expenses in gross receipts, which the CIT(A) upheld. The assessee appealed this decision.

What were the issues?

Whether mobilization advance and reimbursement of expenses are includible in gross receipts for computing income under Section 44BB of the Income Tax Act.

Which sections of the Income-tax Act were involved?

Section 44BB,Section 5,Section 9

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

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Income Tax Appellate Tribunal, DELHI BENCH “B”: NEW DELHI

Before: SHRI KULDIP SINGH & SHRI PRASHANT MAHARISHI

For Appellant: Shri Amit Arora, CA
For Respondent: Shri GK Dhall, CIT DR
Hearing: 27/11/2017Pronounced: 27/11/2017

O R D E R PER PRASHANT MAHARISHI, A. M. 1. This appeal is filed by the assessee against the order of the ld Assessing Officer dated 30.01.2015 passed u/s 143(3) read with section 144C(3)(b) of the Income Tax Act, 1961 for Assessment Year 2012-13 raising following grounds of appeal:- “1. That the ld CIT(A) has erred on facts and in law in affirming the action of the AO in holding that the amount aggregating to Rs. 85435158 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.

2. That the ld CIT(A) has erred on facts and in law in affirming the action of the AO in holding that the receipts on account of reimbursement of expenses amounting to Rs. 342000/- were includible in the gross receipts for the purpose of determination of income u/s 44BB of the Act as opposed to the claim of the appellant that the same cannot given rise to income for taxation purposes.”

2.

The brief facts of the case is that the assessee is engaged in providing services and facilities in connection with exploration of mineral oil. It filed its return of income for AY 2011-12 on 29.09.2012 declaring income of Rs. 200092310/-. The income was offered u/s 44BB of the Income Tax Act. However, the claim of the assessee is that reimbursement of Rs.

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