BJ SERVICES COMPANY MIDDLE EAST LIMITED,MUMBAI vs. DEPUTY COMMISSIONER OF INCOME TAX, DEHRADUN

the order dated 23/05/2025 passed by Ld. CIT(A).

“10.9. The ld. AR had stated that the decision of Delhi Tribunal in the case of B J Services Co. Middle East reported in [200] 29 SOT 312 (Delhi) has decided the issue in favour of the revenue. But this decision has been considered by the Special Bench of Delhi Tribunal in the case of ACIT vs Clough Engineering Ltd reported in 138 TTJ 385 (Delhi)(SB). We have gone through the decision of Special Bench and we find in that case, the issue was concerned with taxability under treaty provisions and particularly interpreting the expression ‘in connection with PE’. Whereas in the instant case before us, the assessee had admittedly offered the income under the domestic provisions and had not even disputed the same. Hence the decision of Special Bench of Delhi Tribunal relied upon by the ld. AR does not come to the rescue of the assessee in the instant case. 10.10. Moreover, we find that the decision of Delhi Tribunal relied by ld. DR in the case of B J Services Co. Middle East has been approved by the Hon’ble Jurisdictional High Court reported in 380 ITR 138 (Uttarakhand) wherein it was held that interest on refund u/s 244A of the Act arising to a foreign company would be taxed at Maximum Marginal Rate. 10.11. In view of the aforesaid observations and respectfully following the judicial precedents relied upon hereinabove, the Ground No. 5 raised by the assessee for the Asst Year 2015-16 is dismissed.”