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Income Tax Appellate Tribunal, DELHI BENCH ‘C’ : NEW DELHI
Before: SHRI H.S. SIDHU & SHRI L.P. SAHU
ORDER PER H.S. SIDHU, JM
The Assessee has filed the Appeal against the Assessment Order dated 16.11.2015 of the Ld. Joint Commissioner of Income Tax (International Taxation), Dehradun pertaining to assessment year 2011-12 on the following grounds:-
Based on the facts and circumstances of the case, your appellant respectfully submits the following ground:-
Ground No. 1
On the facts and circumstances of the case, the Ld. AO/DRP has erred on facts and in law in holding that the amounts aggregating to INR 162,800,614/-, received by the appellant from its customers as reimbursement of actual expenses (tools and fuel reimbursement) incurred by the appellant on their behalf, is to be included in the gross receipts u/s. 44BB of the Income Tax Act,
1961.
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 the aforementioned ground of appeal or add a new ground or grounds of appeal at any time before or at the time of hearing of the appeal.
The brief facts of the case are that assessee is a company incorporated under the laws of Australia having its registered office at Perth Australia. The Indian Project offers is at Mumbai. The assessee is engaged in the business of performing drilling operations through the provisions of rigs and integrated services in connection with the exploration and exploitation and production of mineral oil in India. The assessee is filing return of income offering its income under the provisions of the Income tax Act. For assessment yedar 2011-12 it filed its e-return of income on 25.11.2011 declaring total income of Rs. 8,37,17,415/-. Consequent upon the directions of the DRP, the AO assessed the income of the assessee at Rs. 9,99,97,480/- u/s. 143(3)/144(C) of the I.T. Act, 1961 vide order dated 16.11.2015 by holding that the amounts aggregating to INR 162,800,614/-, received by the assessee from its customers as reimbursement of actual expense (tools and fuel reimbursement) incurred by the assessee on their behalf, is to be included in the gross receipts u/s. 44 BB of the Income Tax Act, 1961. Against the assessment order, the Assessee is in appeal before the Tribunal.
Aggrieved with the aforesaid impugned order of the Ld. JCIT (Int. Taxation), Assessee is in Appeal before the Tribunal.
At the time of hearing, Ld. Counsel of the assessee has stated that issue in dispute is squarely covered by the decision of the Coordinate Bench in assessee’s own case for assessment year 2009- 10 & 2010-11. He placed on record the copy of the decision in (AY 2010-11). He referred to para no. 5. Of that decision wherein the Coordinate Bench relying on the decision of the Hon’ble Jurisdictional High Court in the case of Haliburton Offshore Services Incorporation (200 ITR 265) has held that it all receipts which are intricately linked the services rendered by the assessee is to be considered as a part of the receipt for the purposes of computation of income useless u/s. 44 BB of the Income Tax Act.
6. Ld. DR also agreed with the above proposition and submitted that this issue is squarely covered against the assessee in its own case by the decision of the Coordinate Bench for assessment years 2009-10 & 2010-11.
We have carefully considered the rival contentions and we have also perused the decision of the Coordinate Bench in the case of the assessee itself for assessment year 2009-10 & 2010-11. For the sake of convenience, we are reproducing the finding of the Tribunal for the assessment year 2010-11 wherein the similar issue has already been decided against the assessee as under:-
“5. We have carefully considered the rival contentions and we have also perused the decision of the Coordinate Bench in the case of the assessee itself for assessment year 2009-10 wherein the issue has already been decided against the assessee as under:- 4. The assessee’s representative submitted that the assessee has preferred an appeal before the Jurisdictional High Court of Uttarakhand in this regard but he fairly conceded that the order of Coordinate Bench of the Tribunal still holds field because the same has not been set aside or modified by the Hon’ble Higher
Appellate forum till date. In view of the above, we observe that the present case is also squarely covered by the judgement of ITAT, Delhi F Bench dated 27.4.2012 in ITA No.
5287/Del/2011 for AY 2008-09)
(Sura) and the sole ground of the assessee deserves to be decided against the assessee. The assessee’s representative has placed his reliance on the judgment of Hon’ble Jurisdictional
High Court of Uttrakhand in the case of Haliburton Offshore
Service Inc (2008) 300 ITR 265
{Uttarakhand} wherein it has been held that the aggregate amount received by non-resident assessee is chargeable to tax u/s 44BB of the Act at 10% without any deduction like freight and transportation charges. The ld. DR contended that the Hon'ble
High' Court of Uttarakhand has considered the scheme of presumptive determination u/s 44BB of the Act and has held that this section is a complete code in itself and provides for taxation of all receipts' whether arising in India or outside. Thus, for the purpose of 'presumptive determination of assessee's profits, quantum of amount received by it from its customers against its reimbursement of fuel and material recharge, which are intricately' linked to the-services were rendered by the assessee and incurred by it, has to be considered as a part of the receipt for the purposes of computation of income u/s 44B
(sec. 44BB) of the Act.
5. In the light of discussions made hereinabove and when the Ld. AR accepted the position that the issue is squarely covered by the aforesaid decision while no other contrary decision was brought to our notice nor Ld. AR placed any contrary material before us controverting the aforesaid findings when the ld. AR accepted the position that. The issue is squarely covered by the aforesaid decision while no other contrary decision was brought to our notice nor ld AR placed arty contrary material before us controverting the aforesaid findings of the Assessing Officer, we have no hesitation in upholding the findings of the Assessing Officer. 'In view of above facts and decision of the coordinate bench in case of the assessee for "previous year we confirm the finding of the Ld. CIT(A) in holding that reimbursement of Rs. 225347824/- received by the appellant from its customers as reimbursement of actual expenses incurred by the appellant on "their behalf is to be included in the gross' receipts under section 44 BB of the Income Tax Act, 1961.
In the result the solitary ground of the appeal is dismissed.” 8. Keeping in view of the facts and circumstances of the case and respectfully following the precedent, as aforesaid, we confirm the finding of the AO in holding that INR 162,800,614/-, received by the assessee from its customers as reimbursement of actual expense (tools and fuel reimbursement) incurred by the assessee on their behalf, is to be included in the gross receipts u/s. 44 BB of the Income Tax Act, 1961, accordingly the ground raised by the assessee stand rejected.
In the result, the Assessee’s Appeal stands dismissed.
Order pronounced in Open Court on this 22-11-2017.