BJ SERVICES COMPANY MIDDLE EAST LIMITED,MUMBAI vs. DEPUTY COMMISSIONER OF INCOME TAX, DEHRADUN
What did the Tribunal hold?
The Tribunal held that the income of a foreign company, under Section 244A of the Act, arising from the specified transactions should be taxed at the maximum marginal rate.
What were the facts?
The appeals were filed against the Revenue For Assessment Year 2015-16 and 2016-17 concerning the orders of Commissioner of Income Tax (Appeals). The core issue revolved around the taxability of income earned by a foreign company.
What were the issues?
Whether income earned by a foreign company, under Section 244A of the Income Tax Act, should be taxed at the maximum marginal rate or not.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Cases cited in this judgment(3)Show listHide list
Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.
- ACIT v. Clough Engineering Ltd.29 citing138 TTJ 385 · 2011 · ITAT
- Middle East Ltd. v. Asst Commissioner11 citing380 ITR 138 · 2016 · HC
- 29 SOT 3128 citing29 SOT 312 · ITAT
Income Tax Appellate Tribunal, DELHI
Before: YOGESH KUMAR U.S. & SHRIMANISH AGARWAL
the order dated 23/05/2025 passed by Ld. CIT(A).
The solitary issue involved in the captioned Appeals isas to whether interest income on income tax refund earned u/s 244A of the Income Tax Act, 1961 ('Act' for short) deserves to be chargeable to tax on maximum marginal rate of 40% or not.
The above issue involved in the present Appeal is no more res- integra. The Co-ordinate Bench of the Tribunal in the case of Schlumberger Asia Services Ltd, Vs. DCIT in vide order dated 15/09/2023 relying on the Judgment of Jurisdictional High Court, held as under:-
“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.”
By respectfully following the order of the Tribunal in the case of Schlumberger Asia Services Ltd. (supra), we hold that interest refund under Section 244A of the Act arising to foreign company would be taxed at maximum marginal rate. Accordingly, we allow the Revenue’s Appeal in and 53/DDN/2024 and dismiss the Assessee’s Order pronounced in the open court on 19th November, 2025
More judgments on Section 244A
- Shailesh Khodabhai Ramani, Rajkot vs ITO, Ward-2(1)(3), RajkotITA 366/RJT/2024[2012-13]Status: Disposed15 Oct 2026AY 2012-13
- Shailesh Khodabhai Ramani, Rajkot vs ITO, Ward-2(1)(5), RajkotITA 257/RJT/2024[2011-12]Status: Disposed15 Oct 2026AY 2011-12
- Credit Agricole Corporate and Investment… vs The Assistant Commissioner of Income-Tax…ITA 3453/MUM/2026[2022-23]Status: Disposed8 Oct 2026AY 2022-23
- Credit Agricole Corporate and Investment… vs The Assistant Commissioner of Income Tax…ITA 6805/MUM/2024[2021-22]Status: Disposed8 Oct 2026AY 2021-22
- Pratibha Sanjai Srivastava, Ahmedabad vs Income Tax Officer, Ward 7(2)(1), AhmedabadITA 2565/AHD/2026[2021-2022]Status: Disposed29 Sept 2026AY 2021-2022
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