DY. COMMISSIONER OF INCOME TAX, DEHRADUN vs. HALLIBURTON OFFSHORE SERVICES INC., MAHARASHTRA

The Ld. Departmental Representative submitted that the Ld. CIT(A) committed error in considering the interest income as taxable and chargeable to tax as per the provision of Article 11 of DTAA at 15%, by relying on the assessment order sought for allowing the Appeal.

Per contra, the Ld. Assessee's Representative submitted that there is no error in the approach of the Ld. CIT(A) in following the ratio laid down by the Tribunal in the case of Expro Gulf Ltd. (supra), wherein the Tribunal followed the Judgment of Hon'ble High Court in the case of B. J. Services ME Limited, thus sought for dismissal of the Ground No. 2 and 2.1 of the Revenue.

We have heard both the parties and perused the material available on record. In view of the fact that the Ld. CIT(A) has followed the order of the Co-ordinate Bench of the Tribunal in the case of Expro Gulf Ltd. (supra), wherein the Tribunal followed the Judgment of Hon'ble High Court in the case of B. J. Services ME Limited and held that the interest income on income tax refunds shall be liable to be taxed @15% as per Article 11 of tax treaty between India and USA, in the absence of any contrary precedent brought on record, in view of the settled principals of law, we find no error or infirmity in the order of the Ld. CIT(A). Accordingly, finding no merits in Ground No. 2 and 2.1 of the Revenue, the same are dismissed.

The Ground No. 1 of the Revenue is on the issue of taxability of the Assessee’s receipts as Royalty/FTS covered u/s 9(1)(vi)/9(1)(vii) r.w.s 44DA of the Act treated by the Assessing Officer (A.O) as against such receipts offered by the Assessee under the ambit of Section 44BB of the Act.

We have already decided the above issue of taxability of Assessee’s receipt as Royalty/FTS and held that the said revenues deserve to be taxed u/s 44BB of the Act by following the ratio laid down by the Tribunal in Assessee’s own case for Assessment Year 2013-14 and 2014-15. Accordingly, by applying the said findings and the conclusion mutatis mutandis in the present Appeal, we dismiss the Ground No. 1 of the Revenue.

The Ground No. 2 and its sub grounds of the Revenue are on the taxability of interest u/s 244A of the Income Tax Refund. It was the case of the Assessee that said income Royalty/FTS is liable to be taxed at 15% under DTAA as against the Department’s stand of maximum of marginal right under the Income Tax Act.

We have already decided the above issue in Assessment Year 2017-18 (supra) in favour of the Assessee holding that the interest income on income tax refunds shall be liable to be taxed @15% as per Article 11 of tax treaty between India and USA. Accordingly, by applying the said findings and the conclusion mutatis mutandis in the present Appeal, we dismiss the Ground No. 2 of the Revenue.

Solitary issue involved in the above Appeal of the Revenue urged in Ground No. 1 to 5 is regarding taxability of the Assessee’s receipts as Royalty/FTS covered u/s 9(1)(vi)/9(1)(vii) r.w.s 44DA of the Act treated by the Assessing Officer (A.O) as against such receipts offered by the Assessee under the ambit of Section 44BB of the Act.

We have already decided the above issue of taxability of Assessee’s receipt as Royalty/FTS and held that the said revenues deserve to be taxed u/s 44BB of the Act by following the ratio laid down by the Tribunal in Assessee’s own case for Assessment Year 2013-14 and 2014-15. Accordingly, by applying the said findings and the conclusion mutatis mutandis in the present Appeal, we dismiss the Ground No. 1 to 5 of the Revenue.

In the Result, appeals of the Revenue in ITA Nos., 187/DDN/2024, 175/DDN/2024 and 188/DDN/2024 are dismissed.