Loading High Court cases…
2 orders · Page 1 of 1
The High Court held that the ITAT had committed no error of law in finding that the income received by the assessee for services rendered to EOGIL was not taxable under Section 44BB of the Income Tax Act, 1961. This was primarily because the Production Sharing Contract (PSC) between EOGIL and the Indian concern was approved under Section 42 of the Act, and the Double Taxation Avoidance Agreement (DTAA) between India and the United States of America was applicable. The Court noted that there was little evidence to suggest the assessee company had a Permanent Establishment (PE) in India, as it likely worked for less than ninety days during the relevant year. Consequently, as there was no PE in India, no tax was payable by the assessee in India under the DTAA. The Court also referred to its prior judgment in CIT Vs. M/s Enron Oil & Gas Expat Service Inc., Dehradun, dated 26.11.2012, which addressed a similar issue in favour of the assessee.
The High Court held that the due date referred to in Section 36(1)(va) of the Income Tax Act, 1961, must be read in conjunction with Section 43B(b) of the Act. Section 43B(b) provides that a deduction for employer's contribution to provident fund is allowed only in the year it is actually paid. The proviso to Section 43B states that this deduction is allowed if the sum is paid on or before the due date for furnishing the return of income for the previous year in which the liability was incurred, and evidence of such payment is furnished. The Court noted that the ITAT had allowed the deduction following the judgment of the Apex Court in CIT vs. Vinay Cement Ltd. However, the High Court, following its own Division Bench judgment in CIT vs. Kichha Sugar Company Limited (Income Tax Appeal No. 50 of 2009), held that the employees' contribution paid before the filing of the return is allowable to the extent of payment made before furnishing the return. Therefore, the substantial question of law was answered in the negative. The appeal was dismissed.