DCIT (INTERNATIONAL TAXATION), DEHRADUN vs. M/S. DEEPWATER PACIFIC 1 INC., MUMBAI

PDF · subscribers
ITA 707/DEL/2016Status: DisposedITAT Delhi08 March 2019AY 2011-124 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that service tax collected does not form part of the gross receipts for the purpose of computation of income under Section 44BB. This decision followed previous judgments by the Delhi High Court and the ITAT itself.

What were the facts?

The Revenue appealed against the CIT(A)'s order which excluded service tax from the gross revenue for computing income under Section 44BB. The assessee contended that service tax has no profit element and is collected statutorily.

What were the issues?

Whether service tax collected by the assessee is includible in gross revenue for the purpose of computation of income under Section 44BB of the Income Tax Act, 1961.

Which sections of the Income-tax Act were involved?

Section 44BB

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show 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.

Income Tax Appellate Tribunal, DELHI BENCHES “F” : DELHI

Before: SHRI BHAVNESH SAINI, J.M. & SHRI O.P. KANT, A.M.

Hearing: 07.03.2019Pronounced: 08.03.2019

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.

1.

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.

3.

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.”

4.

The Ld. D.R. did not dispute the same.

5.

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.

More judgments on Section 44BB

All 388 judgments and leading authorities on Section 44BB →

Recent GST High Court judgments

Search GST case law →