Baker Hughes Asia Pacific Ltd., New Delhi V. ADIT, Dehradun

CO 38/DEL/2013

• Counselvise Citation: [2014] 122 COUNSELVISE.COM (IT) 9837 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 6 month(s) 6 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 05-09-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 27-08-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 27-02-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH A AA A : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G.D. AGRAWAL, VICE BEFORE SHRI G.D. AGRAWAL, VICE BEFORE SHRI G.D. AGRAWAL, VICE BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND PRESIDENT AND PRESIDENT AND PRESIDENT AND SHRI SHRI SHRI SHRI ABY T. VARKEY ABY T. VARKEY ABY T. VARKEY ABY T. VARKEY, JUDICIAL , JUDICIAL , JUDICIAL , JUDICIAL MEMBER MEMBER MEMBER MEMBER ITA NO ITA NO ITA NO ITA NO. .. .6476/DEL/2012 6476/DEL/2012 6476/DEL/2012 6476/DEL/2012 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR : : : : 2009 2009 2009 2009- -- -10 1010 10 M/S BAKER HUGHES ASIA M/S BAKER HUGHES ASIA M/S BAKER HUGHES ASIA M/S BAKER HUGHES ASIA PACIFIC LIMITED, PACIFIC LIMITED, PACIFIC LIMITED, PACIFIC LIMITED, C/O NANGIA & COMP C/O NANGIA & COMP C/O NANGIA & COMP C/O NANGIA & COMPANY, ANY, ANY, ANY, SUITE 4A, PLAZA M SUITE 4A, PLAZA M SUITE 4A, PLAZA M SUITE 4A, PLAZA M- -- -6, 6,6, 6, JASOLA, JASOLA, JASOLA, JASOLA, NEW DELHI NEW DELHI NEW DELHI NEW DELHI 110 025. 110 025. 110 025. 110 025. PAN : AACCB3714F. PAN : AACCB3714F. PAN : AACCB3714F. PAN : AACCB3714F. VS. VS. VS. VS. ASSISTANT DIRECTOR OF INCOME TAX, ASSISTANT DIRECTOR OF INCOME TAX, ASSISTANT DIRECTOR OF INCOME TAX, ASSISTANT DIRECTOR OF INCOME TAX, INTERNATIONAL TAXATION, INTERNATIONAL TAXATION, INTERNATIONAL TAXATION, INTERNATIONAL TAXATION, DEHRADUN. DEHRADUN. DEHRADUN. DEHRADUN. (APPELLANT) (RESPONDENT) ITA NO ITA NO ITA NO ITA NO.190/DEL/2013 .190/DEL/2013 .190/DEL/2013 .190/DEL/2013 ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : 2009 2009 2009 2009- -- -10 1010 10 ASSISTANT DIRECTOR ASSISTANT DIRECTOR ASSISTANT DIRECTOR ASSISTANT DIRECTOR OF OF OF OF INCOME TAX, INCOME TAX, INCOME TAX, INCOME TAX, INTERNATIONAL TAXATION, INTERNATIONAL TAXATION, INTERNATIONAL TAXATION, INTERNATIONAL TAXATION, DEHRADUN. DEHRADUN. DEHRADUN. DEHRADUN. VS. VS. VS. VS. M/S BAKER HUGHES ASIA PACIFIC M/S BAKER HUGHES ASIA PACIFIC M/S BAKER HUGHES ASIA PACIFIC M/S BAKER HUGHES ASIA PACIFIC LIMITED, LIMITED, LIMITED, LIMITED, C/O NANGIA & COMPANY, C/O NANGIA & COMPANY, C/O NANGIA & COMPANY, C/O NANGIA & COMPANY, SUITE 4A, PLAZA M SUITE 4A, PLAZA M SUITE 4A, PLAZA M SUITE 4A, PLAZA M- -- -6, 6,6, 6, JASOLA, JASOLA, JASOLA, JASOLA, NEW DELHI NEW DELHI NEW DELHI NEW DELHI 110 025. 110 025. 110 025. 110 025. PAN : AACCB3714F. PAN : AACCB3714F. PAN : AACCB3714F. PAN : AACCB3714F. (APPELLANT) (RESPONDENT) CROSS OBJECTION NO.38/DEL/2013 CROSS OBJECTION NO.38/DEL/2013 CROSS OBJECTION NO.38/DEL/2013 CROSS OBJECTION NO.38/DEL/2013 ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : 2009 2009 2009 2009- -- -10 1010 10 M/S BAKER HUGHES ASIA M/S BAKER HUGHES ASIA M/S BAKER HUGHES ASIA M/S BAKER HUGHES ASIA PACIFIC LIMITED, PACIFIC LIMITED, PACIFIC LIMITED, PACIFIC LIMITED, C/O NANGIA & COMPANY, C/O NANGIA & COMPANY, C/O NANGIA & COMPANY, C/O NANGIA & COMPANY, SUITE 4A, PLAZA M SUITE 4A, PLAZA M SUITE 4A, PLAZA M SUITE 4A, PLAZA M- -- -6, 6,6, 6, JASOLA, JASOLA, JASOLA, JASOLA, NEW DELHI NEW DELHI NEW DELHI NEW DELHI 110 025. 110 025. 110 025. 110 025. PAN : AACCB3714F. PAN : AACCB3714F. PAN : AACCB3714F. PAN : AACCB3714F. VS. VS. VS. VS. ASSISTANT DIRECTOR OF INCOME TAX, ASSISTANT DIRECTOR OF INCOME TAX, ASSISTANT DIRECTOR OF INCOME TAX, ASSISTANT DIRECTOR OF INCOME TAX, INTERNATIONAL TAXATION, INTERNATIONAL TAXATION, INTERNATIONAL TAXATION, INTERNATIONAL TAXATION, DEHRADUN. DEHRADUN. DEHRADUN. DEHRADUN. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI AMIT ARORA, CA. REVENUE BY : SHRI SANJEEV SHARMA, CIT-DR. ITA-6476/D/2012, 190/D/2013 & CO-38/D/2013 2 ORDER ORDER ORDER ORDER PER G.D. AGRAWAL, VP PER G.D. AGRAWAL, VP PER G.D. AGRAWAL, VP PER G.D. AGRAWAL, VP : : : : THE APPEALS BY THE ASSESSEE AND THE REVENUE ARE DI RECTED AGAINST THE ORDER OF LEARNED CIT(A)-II, DEHRADUN DA TED 18 TH OCTOBER, 2012 FOR THE AY 2009-10. 2. IN THE ASSESSEES APPEAL, I.E., ITA NO.6476/DEL/ 2012, FOLLOWING GROUNDS ARE RAISED:- GROUND NO.1 THAT BASED ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. COMMISSIONER OF INCOME-TAX, APPEALS-II, DEHRADUN (CIT) ERRED HOLDIN G THAT RECEIPTS OF RS.87,482,347 ON ACCOUNT OF OFFSHORE SU PPLY OF MATERIAL WAS CHARGEABLE TO TAX IN INDIA UNDER SECTI ON 44BB OF THE ACT AS OPPOSED TO THE APPELLANTS CLAIM THAT THE SAME WAS NOT CHARGEABLE TO TAX IN INDIA AS THE INCO ME FROM THESE SUPPLIES HAD ACCRUED AND ARISEN TO THE APPELLANT OUTSIDE INDIA. GROUND NO.2 WITHOUT PREJUDICE TO GROUND NO.1, THAT BASED ON THE FACTS AND CIRCUMSTANCES OF THE CASE, T HE LD.COMMISSIONER OF INCOME-TAX, APPEALS-II, DEHRADUN (CIT) ERRED IN NOT APPRECIATING THAT EVEN IF ANY PART OF THE TRANSACTION OF OFFSHORE SUPPLY OF MATERIAL WAS EXEC UTED IN INDIA, ONLY SUCH PROFITS COULD BE HELD TAXABLE IN I NDIA AS WERE ATTRIBUTABLE TO THE INDIAN PERMANENT ESTABLISH MENT OF THE APPELLANT AND NOT THE ENTIRE RECEIPTS OF RS.87, 482,347. GROUND NO.3 THAT BASED ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. COMMISSIONER OF INCOME-TAX, APPEALS-II, DEHRADUN (CIT) ERRED IN HOL DING THAT RECEIPTS OF RS.42,838,415 ON ACCOUNT OF SERVIC E TAX WERE INCLUDIBLE IN THE GROSS RECEIPTS FOR THE PURPO SE OF DETERMINING INCOME UNDER SECTION 44BB OF THE INCOME -TAX ACT, 1961. GROUND NO.4 THAT BASED ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT ERRED IN NOT FOLLOWING THE JUDGMENT OF THE JURISDICTIONAL INCOME-TAX APPEL LATE TRIBUNAL, DELHI G BENCH IN ITA NO.5284/DEL/2011 I N THE CASE OF SEDCO FOREX INTERNATIONAL DRILLING INC VS. ADDL. DIRECTOR OF INCOME-TAX WHEREIN IT WAS HELD THAT SER VICE-TAX RECEIPTS WERE NOT INCLUDIBLE IN THE GROSS RECEIPTS FOR THE ITA-6476/D/2012, 190/D/2013 & CO-38/D/2013 3 PURPOSE OF DETERMINING INCOME UNDER SECTION 44BB OF THE INCOME-TAX ACT, 1961. YOUR APPELLANT PRAYS THAT THE ERRONEOUS ORDER BE CA NCELLED AND APPROPRIATE RELIEF MAY BE GRANTED TO THE APPELL ANT. 3. IN THE REVENUES APPEAL, VIDE ITA NO.190/DEL/201 3, FOLLOWING GROUNDS ARE RAISED:- (I) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN HOLDING THAT THE HIRE OF EQ UIPMENT AND PERSONNEL WAS NOT IN THE NATURE OF FTS AND EQUI PMENT ROYALTY SQUARELY COVERED IN THE DEFINITION PROVIDED U/S 9(1)(VI) AND 9(1)(VII) OF THE IT ACT, 1961 RESPECTI VELY. (II) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN HOLDING THAT THE INCOME OF THE ASSESSEE WAS TAXABLE UNDER THE PROVISIONS OF SEC. 4 4BB EVEN THOUGH THE NATURE OF SERVICES RENDERED BY THE ASSESSEE WERE IN THE NATURE OF ROYALTY AND FTS AND NOT FOR A PROJECT UNDERTAKEN BY THE ASSESSEE. (III) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN HOLDING THAT INCOME FROM EQUIPMENT RENTAL IS NOT CHARGEABLE UNDER SECTION 9( 1)(VI) OF THE I.T. ACT, WHEN UNDER ITS EXCLUSIONARY CLAUSE , INCOME IN RESPECT OF SECOND LEG CONTRACTS IN EQUIPMENT R ENTAL BUSINESS ARE NOT COVERED U/S 44BB. (IV) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN HOLDING THAT THE BIFURCATIO N OF REVENUES IN FTS AND ROYALTY BY THE AO IS WITHOUT AN Y BASIS, SINCE PRIMARY FACT AT ENTRY POINT IS WHETHE R APPELLANTS CASE IS COVERED UNDER 44BB OR OTHERWISE THUS IGNORING THE SPECIAL SCHEME OF TAXATION OF ROYALTY/ FTS ENVISAGED IN THE ACT WHICH REQUIRES THAT AT ENTRY P OINT ITSELF THESE ARE EXCLUDED FROM 44BB IF IN THE NATUR E OF FTS OR ROYALTY. (V) ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE CIT(A) HAS ERRED IN HOLDING THAT THE INCOME OF THE ASSESSEE WAS TAXABLE UNDER THE PRESUMPTIVE PROVISIONS OF SEC . 44BB AND IGNORING THE FACT THAT TAXABILITY U/S 44BB SHAL L NOT APPLY IN RESPECT OF INCOME REFERRED TO IN SECTION 4 4DA IN VIEW OF THE CLARIFICATORY PROVISO TO SEC. 44BB AND SEC. 44DA. ITA-6476/D/2012, 190/D/2013 & CO-38/D/2013 4 (VI) WHETHER THE CIT(A) ERRED IN HOLDING THAT RETROSPECTIVELY CANNOT BE READ INTO AMENDMENTS RELY ING ON THE CASE OF BJ SERVICES COMPANY MIDDLE EAST LTD V/S DDIT NOT APPRECIATING THE FACT THAT PROVISO TO SECTION 4 4DN 44BB BROUGHT IN BY THE FINANCE ACT 2011 WAS ONLY CLARIFICATORY IN NATURE AND ITS APPLICATION HAS TO BE READ INTO THE ACT IN VIEW OF THE DECISION OF THE APEX CO URT IN THE CASE OF SEDCO FOREX INTERNATIONAL V/S CIT. (VII) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE CIT(A) HAS ERRED IN NOT APPRECIATING THE FINDIN G GIVEN BY THE AO WHO HAD HELD THAT THE FEE FOR TECHNICAL SERVICES/ROYALTY RECEIVED BY THE ASSESSEE WHICH IS A NON- RESIDENT COMPANY WAS CORRECTLY ESTIMATED @ 25% OF G ROSS RECEIPTS AS PER THE REQUIREMENTS OF RULE 10 OF THE INCOME TAX RULES, 1962, IN THE ABSENCE OF BOOKS OF ACCOUNT S AND TAXED ACCORDINGLY. (IX) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE CIT(A) HAS ERRED IN HOLDING THAT INTEREST U/S 2 34-B WAS NOT CHARGEABLE IN THIS CASE BY RELYING UPON THE DEC ISION OF HONBLE UTTARAKHAND HIGH COURT IN THE CASE OF MAERS K (334 ITR 79) WHEREAS THE DEPARTMENT HAS CONTESTED THE IS SUE AND HAS FILED SLP BEFORE THE APEX COURT AGAINST IN THE CASE OF JACOBS CIVIL INCORPORATED/MITSUBISHI INVOLVING S IMILAR ISSUE. (X) THE APPELLANT PRAYS FOR LEAVE TO ADD, AMEND, MO DIFY OR ALTER ANY GROUNDS OF APPEAL AT THE TIME OR BEFOR E THE HEARING OF THE APPEAL. 4. AT THE TIME OF HEARING BEFORE US, BOTH THE PARTI ES FAIRLY ADMITTED THAT GROUND NOS.1 & 2 OF THE ASSESSEES APPEAL AND ALL THE GROUNDS IN THE REVENUES APPEAL ARE SQUARELY COVERED BY THE DE CISION OF ITAT IN ASSESSEES OWN CASE FOR AY 2007-08 AND 2008-09 VIDE ITA NO.5283/DEL/2010 & 420/DEL/2012. THEY AGREED THAT IN THE AFORESAID CASE, THE ITAT ACCEPTED THE ASSESSEES CONTENTION T HAT SECTION 44BB IS APPLICABLE IN THE CASE OF THE ASSESSEE AND THEY RES TORED THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR ATTRIBUTING T HE INCOME OUT OF TWO CONTRACTS TO THE EXTENT OF OPERATIONS RELATING TO S ALES CARRIED OUT IN INDIA. BOTH THE PARTIES AGREED THAT THE MATTER CAN BE SET ASIDE IN THIS YEAR ALSO AND RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR ITA-6476/D/2012, 190/D/2013 & CO-38/D/2013 5 RECOMPUTING THE ASSESSEES INCOME IN THE LIGHT OF T HE DIRECTION OF ITAT IN ASSESSEES OWN CASE FOR AY 2007-08 & 2008-09 (SU PRA). IN VIEW OF THE ABOVE, WE, RESPECTFULLY FOLLOWING THE DECISION OF ITAT IN ASSESSEES OWN CASE FOR AY 2007-08 & 2008-09 (SUPRA), SET ASID E THE ISSUE RAISED BY THE ASSESSEE VIDE GROUND NOS.1 & 2 AND BY THE RE VENUE VIDE GROUND NOS.1 TO 8 TO THE FILE OF THE ASSESSING OFFI CER AND DIRECT HIM TO RECOMPUTE THE ASSESSEES INCOME AS PER THE FINDING OF THE ITAT IN ASSESSEES OWN CASE FOR AY 2007-08 & 2008-09. 5. GROUND NO.3 OF THE ASSESSEES APPEAL READS AS UN DER:- THAT BASED ON THE FACTS AND CIRCUMSTANCES OF THE C ASE, THE LD. COMMISSIONER OF INCOME-TAX, APPEALS-II, DEH RADUN (CIT) ERRED IN HOLDING THAT RECEIPTS OF RS.42,838,4 15 ON ACCOUNT OF SERVICE TAX WERE INCLUDIBLE IN THE GROSS RECEIPTS FOR THE PURPOSE OF DETERMINING INCOME UNDER SECTION 44BB OF THE INCOME-TAX ACT, 1961. 6. GROUND NO.4 IS ONLY ARGUMENTS IN SUPPORT OF GROU ND NO.3. 7. WE FIND THIS ISSUE TO BE COVERED IN FAVOUR OF TH E ASSESSEE BY THE DECISION OF ITAT IN THE CASE OF SEDCO FOREX INTERNA TIONAL DRILLING INC. VIDE ITA NO.504/DEL/2013, WHEREIN THE ITAT HELD AS UNDER:- 3. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MATERIAL PLACED BEFORE US. WE FIND THAT THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION O F ITAT IN ASSESSEES OWN CASE FOR AY 2008-09 DATED 29 TH JUNE, 2012 VIDE ITA NO.5284/DEL/2011, WHEREIN THE ITAT HELD AS UNDER:- THE SERVICE TAX IS A STATUTORY LIABILITY LIKE CUST OM DUTY. HONBLE UTTARAKHAND HIGH COURT IN THEIR DECISION IN SCHLUMBERGER ASIA SERVICES LTD. (SUPRA) CONCLUDED T HAT REIMBURSEMENT OF CUSTOM DUTY PAID BY THE ASSESSEE C OULD NOT FORM PART OF AMOUNT FOR THE PURPOSE OF DEEMED P ROFITS U/S 44BB UNLIKE THE OTHER AMOUNTS RECEIVED TOWARDS REIMBURSEMENT. FOLLOWING THE VIEW IN THIS DECISION , MUMBAI BENCH IN THEIR DECISION IN ISLAMIC REPUBLIC OF IRAN ITA-6476/D/2012, 190/D/2013 & CO-38/D/2013 6 SHIPPING LINES (SUPRA) HELD THAT SERVICE TAX BEING A STATUTORY LIABILITY, WOULD NOT INVOLVE ANY ELEMENT OF PROFIT AND ACCORDINGLY, THE SAME COULD NOT BE INCLUDED IN THE TOTAL RECEIPTS FOR DETERMINING THE PRESUMPTIVE INCO ME. IN THE LIGHT OF VIEW TAKEN BY THE MUMBAI BENCH, ESPECI ALLY WHEN THE LD.DR DID NOT PLACE ANY MATERIAL BEFORE US CONTROVERTING THE AFORESAID FINDINGS OF THE LD.CIT( A) SO AS TO ENABLE US TO TAKE A DIFFERENT VIEW IN THE MATTER NOR BROUGHT TO OUR NOTICE ANY CONTRARY DECISION, WE ARE OF THE OPINION THAT SERVICE TAX PAID BY THE ASSESSEE COULD NOT FORM PART OF AMOUNT FOR THE PURPOSE OF DEEMED PROFI TS U/S 44BB UNLIKE THE OTHER AMOUNTS RECEIVED TOWARDS REIMBURSEMENT. THEREFORE, GROUND NO.3 IN THE APPEA L IS ALLOWED. 4. FROM THE ABOVE, IT IS EVIDENT THAT THE ITAT DECI DED THE ABOVE ISSUE IN FAVOUR OF THE ASSESSEE FOLLOWING THE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT IN TH E CASE OF DIRECTOR OF INCOME TAX (INTERNATIONAL TAXATION) AND ANOTHER VS. SCHLUMBERGER ASIA SERVICES LTD. [2009 ] 317 ITR 156 (UTTARAKHAND). NO CONTRARY DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT HAS BEEN POINTED OUT. IN VIEW OF THE ABOVE, WE, RESPECTFULLY FOLLOWING THE ABOVE DEC ISION OF HON'BLE JURISDICTIONAL HIGH COURT AND ALSO THE DECI SION OF ITAT IN ASSESSEES OWN CASE CITED SUPRA, DIRECT THE ASSESSING OFFICER TO EXCLUDE SERVICE TAX FROM THE G ROSS RECEIPTS FOR THE PURPOSE OF DETERMINING THE INCOME UNDER SECTION 44BB OF THE INCOME-TAX ACT, 1961. ACCORDIN GLY, GROUND NOS.1 & 2 OF THE ASSESSEES APPEAL ARE ALLOW ED. 8. RESPECTFULLY FOLLOWING THE ABOVE DECISION OF ITA T AND THE DECISION OF HONBLE UTTARAKHAND HIGH COURT IN THE C ASE OF DIRECTOR OF INCOME TAX (INTERNATIONAL TAXATION) AND ANOTHER VS. SCHLUMBERGER ASIA SERVICES LTD. [2009] 317 ITR 156, WE DIRECT THE ASSESSING OFFICER TO EXCLUDE SERVICE TAX FROM THE GROSS RECEIPT FOR T HE PURPOSE OF DETERMINING THE INCOME UNDER SECTION 44BB OF THE IN COME-TAX ACT, 1961. ACCORDINGLY, GROUND NOS.3 & 4 OF THE ASSESSE ES APPEAL ARE ALLOWED. 9. GROUND NO.9 OF THE REVENUES APPEAL READS AS UND ER:- ITA-6476/D/2012, 190/D/2013 & CO-38/D/2013 7 WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE CIT(A) HAS ERRED IN HOLDING THAT INTEREST U/S 234-B WAS NOT CHARGEABLE IN THIS CASE BY RELYING UPON THE DECISIO N OF HONBLE UTTARAKHAND HIGH COURT IN THE CASE OF MAERS K (334 ITR 79) WHEREAS THE DEPARTMENT HAS CONTESTED THE IS SUE AND HAS FILED SLP BEFORE THE APEX COURT AGAINST IN THE CASE OF JACOBS CIVIL INCORPORATED/MITSUBISHI INVOLVING S IMILAR ISSUE. 10. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MA TERIAL PLACED BEFORE US. AT THE TIME OF HEARING BEFORE US, BOTH THE PARTIES FAIRLY AGREED THAT THIS ISSUE IS ALSO COVERED BY THE DECIS ION OF ITAT IN ASSESSEES OWN CASE FOR AY 2007-08 & 2008-09 (SUPRA ) WHEREIN THE ITAT HELD AS UNDER:- 174. INTEREST U/S 234B IS ESSENTIALLY COMPENSATORY IN NATURE FOR THE PERIOD FOR WHICH THE SUMS DUE TO GOVERNMENT ARE WITHHELD BY ASSESSEE. 175. CONSIDERING THE ENTIRETY OF FACTS, WE DIRECT T HE ASSESSING OFFICER NOT TO CHARGE INTEREST U/S 234B I N RESPECT OF ALL THE CONTRACTS ENTERED INTO BY THE ASSESSEE W ITH VARIOUS ORGANIZATIONS IN INDIA EXCEPT WITH RESPECT TO THE CONTRACTS ENTERED INTO WITH HOEC AND ONGC. AS FAR AS INCOME TAXABLE U/S 44BB IN RESPECT OF VARIOUS CONTR ACTS ARE CONCERNED, THE ASSESSEE ITSELF HAS ACCEPTED THE LIA BILITY FROM THE VERY BEGINNING AND, THEREFORE, IT CANNOT B E INFERRED THAT ASSESSEE WOULD HAVE MADE ANY REPRESENTATION WHICH WOULD HAVE INFLUENCED THE DEDU CTOR COMPANIES FOR NOT DEDUCTING THE TAX. HOWEVER, AS F AR AS CONTRACT WITH HOEC AND ONGC ARE CONCERNED, AS WE HA VE HELD THAT INCOME AROSE IN INDIA, THEREFORE, IN VIEW OF DECISION OF HON'BLE DELHI HIGH COURT IN ALCATEL LUC ENT USA INC. (2013-TII-44-HC-DEL-INTL DATED NOV. 07, 2013), THE INTEREST U/S 234B IS LEVIABLE. IN THE RESULT THIS GROUND IS PARTLY ALLOWED. 11. RESPECTFULLY FOLLOWING THE SAME, WE DIRECT THE ASSESSING OFFICER TO RECOMPUTE THE DEDUCTION UNDER SECTION 234B AS PE R THE ABOVE FINDING OF THE ITAT IN AY 2007-08 AND 2008-09. ITA-6476/D/2012, 190/D/2013 & CO-38/D/2013 8 CROSS OBJECTION NO.38/DEL/2013 : CROSS OBJECTION NO.38/DEL/2013 : CROSS OBJECTION NO.38/DEL/2013 : CROSS OBJECTION NO.38/DEL/2013 :- -- - 12. AT THE TIME OF HEARING BEFORE US, IT IS FAIRLY SUBMITTED BY THE LEARNED COUNSEL THAT NO SEPARATE RELIEF IS BEING CL AIMED BY THE CROSS- OBJECTION AND ONCE THE APPEAL OF THE ASSESSEE AS WE LL AS OF THE REVENUE IS DECIDED, THE CROSS-OBJECTION DOES NOT RE QUIRE ANY SEPARATE ADJUDICATION. ACCORDINGLY, THE CROSS-OBJECTION OF THE ASSESSEE IS TREATED AS INFRUCTUOUS AND REJECTED AS SUCH. 13. IN THE RESULT, THE APPEALS OF THE ASSESSEE AND THE REVENUE BOTH ARE DEEMED TO BE PARTLY ALLOWED WHILE THE CROSS-OBJ ECTION BY THE ASSESSEE IS DEEMED TO BE DISMISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 5 TH SEPTEMBER, 2014. SD/- SD/- ( (( (ABY T. VARKEY ABY T. VARKEY ABY T. VARKEY ABY T. VARKEY) )) ) (G.D. AGRAWAL (G.D. AGRAWAL (G.D. AGRAWAL (G.D. AGRAWAL) )) ) JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER VICE PRESIDE VICE PRESIDE VICE PRESIDE VICE PRESIDENT NTNT NT DATED : 05.09.2014 VK. COPY FORWARDED TO: - 1. ASSESSEE : M/S BAKER HUGHES ASIA PACIFIC LIM ITED, M/S BAKER HUGHES ASIA PACIFIC LIMITED, M/S BAKER HUGHES ASIA PACIFIC LIMITED, M/S BAKER HUGHES ASIA PACIFIC LIMITED, C/O NANGIA & COMPANY, SUITE 4A, PLAZA M C/O NANGIA & COMPANY, SUITE 4A, PLAZA M C/O NANGIA & COMPANY, SUITE 4A, PLAZA M C/O NANGIA & COMPANY, SUITE 4A, PLAZA M- -- -6, 6,6, 6, JASOLA, NEW DELHI JASOLA, NEW DELHI JASOLA, NEW DELHI JASOLA, NEW DELHI 110 025. 110 025. 110 025. 110 025. 2. REVENUE : ASSISTANT DIRECTOR OF INCOME TAX, ASSISTANT DIRECTOR OF INCOME TAX, ASSISTANT DIRECTOR OF INCOME TAX, ASSISTANT DIRECTOR OF INCOME TAX, INTERNATIONAL INTERNATIONAL INTERNATIONAL INTERNATIONAL TAXATION, DEHRADUN. TAXATION, DEHRADUN. TAXATION, DEHRADUN. TAXATION, DEHRADUN. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR