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Income Tax Appellate Tribunal, DELHI BENCHES “F” : DELHI
Before: SHRI BHAVNESH SAINI, J.M. & SHRI O.P. KANT, A.M.
ORDER This appeal by Revenue has been directed against the order of Ld. CIT(A)-2, Noida, Dated 19th November, 2015, for the assessment year 2011-2012, challenging the Order of Ld. CIT(A) in holding that the receipts on account of service tax are not income chargeable in gross revenue of the assessee for the purpose of computation of profit under the provisions of Section 44BB of the Income Tax Act, 1961.
2 ITA.No.707/Del./2016 M/s. Deepwater Pacific 1 Inc., Mumbai. 2. The contention of the assessee before the Ld. CIT(A) was that service tax has no profit element in it and it is collected on account of statutory requirements, therefore, it is not taxable under section 44BB of the Income Tax Act, 1961. Several decisions in support of the same were relied upon. The Ld. CIT(A) accepted the contention of assessee and deleted the addition.
At the outset, Learned Counsel for the Assessee submitted that similar issue was decided by ITAT, Delhi B- Bench in the case of same assessee for A.Y. 2012-2013 in ITA.No.3965/Del./2016 and Departmental Appeal have been dismissed vide Order dated 26.04.2018 on the identical issue. The findings of the Tribunal in para-3 is reproduced as under :
“3. We have heard both the sides and perused the relevant material on record. The issue raised in this ground is no more res Integra in view of the judgment of the Hon'ble jurisdictional High Court in DIT vs. Mitchell Drilling International 3 ITA.No.707/Del./2016 M/s. Deepwater Pacific 1 Inc., Mumbai.
Pvt. Ltd. (2016) 380 ITR 130 (Del) in which it has been held that collection of service tax does not form part of gross receipts for the purpose of computation of income u/s 44BB of the Act. Similar view has been taken by the Delhi Tribunal in DCIT (International Taxation) vs. Baker Hughes, Singapore Pte vide its order dated 23.03.2018 in ITA No.6259/Del/2016. Respectfully following the precedent, we uphold the impugned order directing the exclusion of the amount of service tax for the purpose of computation of income u/s 44BB of the Act.”
The Ld. D.R. did not dispute the same.
Considering the above fact, we are of the view that the issue is covered in favour of the assessee by the above Order of the Tribunal. Therefore, the departmental appeal has no merit, the same is accordingly dismissed.
4 ITA.No.707/Del./2016 M/s. Deepwater Pacific 1 Inc., Mumbai. 6. In the result, appeal of the Revenue is dismissed.