Commissioner Of Income Tax ( international Taxation-3) vs. B.j. Services Company Middle East Ltd

IN THE HIGH COURT OF UTTARAKHAND AT NAINITAL

THE HON’BLE THE CHIEF JUSTICE SRI RAGHVENDRA SINGH CHAUHAN AND THE HON’BLE SRI JUSTICE ALOK KUMAR VERMA

INCOME TAX APPEAL No. 08 of 2017

26TH MARCH, 2021

Between:

Commissioner of Income Tax (International Taxation-3)

…Appellant

and

B.J. Services Company Middle East Ltd. …………Respondent

Counsel for the appellant

: Mr. Hari Mohan

Bhatia, learned

counsel.

Counsel for the respondent : Mr. P. R. Mullick,

learned counsel

The Court made the following:

JUDGMENT : (per Hon’ble The Chief Justice Sri Raghvendra Singh Chauhan)

The learned counsel for the appellant submits that the following substantial questions of law are raised in the present appeal:- (i) Whether on the facts and in the

circumstances of the case and in law, the ITAT

has erred in holding that receipts on account of

service tax/VAT are not includible in gross

revenue of the assessee for the purpose of

computation of profits under the provisions of

section 44BB of the I.T. Act, 1961 if the service

tax/VAT have been separately charged in the

bills and accordingly accounted for. (ii) Whether the ITAT has erred in not

appreciating the fact that section 44BB of the

Act is a self-contained code providing for

computation of profit at a fixed percentage of

gross receipts of the assessee and all the

deductions and exclusions from the gross

receipts are deemed to have been allowed to

the assessee. (iii) Whether the ITAT has erred in not

appreciating the fact that once the receipts are

offered to tax u/s 44BB of the Act which

provides for computation of profits on gross

basis, there is no scope for computing or re-

computing the profits by excluding any part of

the receipts from the total turnover as the same

would amount to defeating the very purpose of

providing for a presumptive scheme of taxation

u/s 44BB of the Act and obviating the need for

maintaining accounts for individuals receipts,

payments etc. (iv) Whether the ITAT has erred in

ignoring the ratio of the judgment in the case of

M/s Chowringhee Sales Bureau (P) Ltd. (82 ITR

542, SC) wherein the Hon’ble Apex Court has

held that the sales Tax collected by an assessee

in the ordinary course of its business forms part

of its business receipts. Owing to the inherent

similarity in the nature of sales tax and service

tax, the ratio of the judgment in the said case is

directly applicable to the instant case.

On the other hand, Mr. P.R. Mullick, learned counsel for the assessee submits that an identical substantial questions of law were raised before this Court in the case of Director of Income-tax International Taxation vs. Schlumberger Asia Services Ltd., (2019) 104 taxmann.com 353 (Uttarakhand) (FB).

According to the learned counsel, the said decision was rendered by Full Bench of this Court. Moreover, this Court has answered the substantial questions of law against the Revenue Department. Therefore, even, the substantial questions of law which have been raised in the present appeal are squarely covered and answered by the decision of the Learned Full Bench of this Court. 3.

Heard learned counsel for the parties. 4.

A bare perusal of the substantial questions of law mentioned hereinabove, and in the judgment rendered in the case of Schlumberger Asia Services Ltd., (Supra) clearly reveals that the substantial questions of law being raised in the present appeal have already been answered by the learned Full Bench in the aforementioned case. Therefore, this Court does not find any merit in the present appeal. It is, hereby, dismissed.

_____________________________ RAGHVENDRA SINGH CHAUHAN, C.J.

___________________ ALOK KUMAR VERMA, J.

Dt: 26th March, 2021 JKJ/Pant