SHELF DRILLING INTERNATIONAL INC. (FORMERLY KNOWN AS SEDCO FOREX INTERNATIONAL DRILLING INC.),NEW DELHI vs. ADDL. DIT, DEHRADUN

O R D E R PER DIVA SINGH, J.M. : The present appeal has been filed by the assessee assailing the correctness of the order dated 19.12.2013 of the CIT(A)-II, Dehradun pertaining to 2010-11 on the following ground:-

1. “The Ld. CIT(A) has erred on facts and in law by affirming to the action of the Assessing Officer and holding that the amounts aggregating to Rs.186,120,421/- received by the assessee from its customers as reimbursement of actual expenses incurred by the assessee on their behalf, is to be included in the gross receipts u/s 44BB of the Income Tax Act, 1961.”

2. It was a common stand of the parties before the Bench that the issue raised by the assessee by way of the aforesaid ground is covered against it by the decision of the Hon’ble Uttarakhand High Court in the case of CIT & Another Vs. Halliburton Offshore Services Inc. (2008) 300 ITR 265 (Uttarakhand). The ld. AR submitted that it may be recorded that the appeal of the assessee is admitted and the issue is before the Hon’ble Apex Court thus it may be recorded that the assessee has not given up the issue.

3. We have heard the rival submissions and perused the material on record. Consideirng the order dated 02.08.2013 passed by the Co-ordinate Bench in ITA No.504/Del/2013 in 2009-10 assessment year in the case of the assessee, copy of which has been filed by the ld. AR himself, we find that the identical ground has been dismissed by the Co-ordinate Bench on identical facts. The relevant extract is reproduced hereunder:- “5. Ground No.3 of the assessee's appeal reads as under:- "That the ld.CIT(A) has erred on facts and in law in affirming the action of the A.O. in holding that the amounts aggregating to Rs.284,583,205/- 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 u/s 44BB of the Income Tax Act, 1961."

6. At the time of hearing before us, the learned counsel fairly agreed that this issue is covered against the assessee by the decision of Hon'ble Jurisdictional High Court in the case of CIT and Another Vs. Halliburton Offshore Services Inc. - [2008] 300 ITR 265 (Uttarakhand). The facts in the said case were that the assessee rendered services to the ONGC. For the assessment year 1991-92, it claimed that the amount of `6,16,989/- received on account of reimbursement of freight and transportation charges actually incurred in respect of equipment was not includible while computing its income under Section 44BB. The Assessing Officer rejected the claim but the CIT(A) and the Tribunal accepted it. On appeal, the Hon'ble High Court held as under:- "Held, allowing the appeal, that it was not in dispute that the amount had been received by the assessee. Therefore, the Assessing Officer added the said amount which was received by the non-resident company rendering services under the provisions of section 44BB to the ONGC and imposed the income tax thereon. He was justified in doing so."

7. The ratio of the above decision of Hon'ble Jurisdictional High Court would be squarely applicable to the case of the assessee. Respectfully following the same, we reject ground No.3 of the assessee's appeal.

4. Accordingly in the light of the submissions of the parties respectfully following the order of the Co-ordinate Bench on the same parity of reasoning, we dismiss the grounds of the assessee. For the record, no change in facts or law was brought to our notice by the Ld.AR except that the issue is pending before the Hon’ble Apex Court.