JET DRILLING (S) PTE LTD,NEW DELHI vs. ASST DIT (IT) 3(1), MUMBAI

Facts in brief are that the assessee is a non-resident company, which is engaged in the business of providing services and facilities in connection with the exploitation and production of mineral oil in India. While computing u/s.44B, the AO included services tax so collected by the assessee in its gross receipts and accordingly computed the income.

The contention of ld. AR was that service tax is not includible in the gross receipts while computing profit u/s.44B of the I.T.Act. The issue under consideration is squarely covered by the decision of Hon’ble Delhi High Court in the case of Mitchell Drilling International (P) Ltd. [2016] 380 ITR 130 (Delhi), wherein the Court held that for the purpose of presumptive income of assessee under section 44BB, service tax collected by assessee was not be included in the gross receipts in terms of Section 44BB(2) r.w.s.44BB(1). This order of the Hon’ble Delhi High Court is dated 28-9-2015 and it has already considered by earlier decision of Hon’ble Uttarakhand High Court in the case of DIT Vs. Schlumberger Asia Services Ltd. [2009] 317 ITR 156 as cited by ld. AR.

After the decision of Hon’ble Delhi High Court, ITAT Mumbai bench in the case of Oceaneering International GmbH, ITA No.1023/Mum/2014, order dated 6-11-2015 held that services tax is not includible while computing turn over u/s.44BB.

Respectfully following the decision of Hon’ble Delhi High Court in the case of Mitchell Drilling International (P) Ltd (supra), we do not find any merit for inclusion of service tax in the total turnover, while computing income u/s.44BB(1) of I.T.Act.