ADIT, Dehradun V. M/s. Siem Offshore Inc., Dehradun

ITA 173/DEL/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 6968 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 5 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-07-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 29-06-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 09-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANIMA BARNWAL
• Keywords: Capital asset; Double taxation relief; Deemed to accrue or arise in india; Question of law
• Section: 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER I.T.A.NO.173/DEL/2013 A.Y. : 2008-09 ADIT, INTERNATIONAL TAXATION, 13-A, SUBHASH ROAD, AAYAKAR BHAWAN, DEHRADUN VS. M/S SIEM OFFSHORE INC. C/O NANGIA & CO., 75/7, RAJPUR ROAD, DEHRADUN (PAN: AAKCS6466R) (APPELLANT) (RESPONDENT) DEPARTMENT BY : SMT. ANIMA BARNWAL, SR. DR ASSESSEE BY : SH. AMIT ARORA, ADVOCATE DATE OF HEARING : 29-06-2016 DATE OF ORDER : 08-07-2016 ORDER PER H.S. SIDHU : JM THE REVENUE HAS FILED THE PRESENT APPEAL AGAINST T HE IMPUGNED ORDER DATED 25/10/2012 PASSED BY THE LD. COMMISSIO NER OF INCOME TAX (APPEALS)-II, DEHRADUN ON THE FOLLOWING GROUNDS:- 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE, THE CIT(A) HAS ERRED IN BRINGING TO TAX THE RECEIPT OF NON- RESIDENT FROM LEASE OF VESSEL AND CREW TO EMGS ON A CCOUNT OF TIME CHARTER AGREEMENT FOR ASSISTING EMGS IN EXPLOR ATION OF SEABED AND SUBSOIL FOR DATA INTERPRETATION, U/S. 44 BB OF THE ACT, INSTEAD OF ROYALTY/FTS AS TREATED BY THE AO UN DER ARTICLE 13 OF THE DTAA SIGNED BETWEEN INDIAN AND NORWAY. ITA NO. 173/DEL/2013 2 2. WHETHER AN THE FACTS AND CIRCUMSTANCES OF THE CA SE THE CIT (A) HAS ERRED IN NOT APPRECIATING THE FACT THAT 44BB DOES NOT COVER 'SECOND LEG' CONTRACTS, AND THAT THIS BEN EFICIAL POSITION IS FOR ASSESSEE WHO ARE ENGAGED IN PROSPEC TING FOR OR EXTRACTION, OR PRODUCTION OF MINERAL OILS AND NOT F OR ASSESSEE IN LEASING/TIME CHARTER BUSINESS. 3. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE THE CIT (A) HAS ERRED IN HOLDING THAT INCOME FROM EQUIP MENT 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 LEASING/TIME CHARTER BUSI NESS ARE NOT COVERED UNDER SECTION 44BB. 4. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE THE CIT (A) HAS ERRED IN HOLDING THAT THE INCOME OF THE ASSESSEE WAS TAXABLE UNDER THE PRESUMPTIVE PROVISIONS OF SEC . 44BB, IGNORING THE FACT THAT TAXABILITY UNDER SECTION 44B B SHALL NOT APPLY IN RESPECT OF INCOME REFERRED TO IN SECTION 4 4DA IN VIEW OF THE CLARIFICATORY PROVISO TO SEC. 44BB AND SEC. 44DA. 5. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE THE CIT(A) HAS ERRED IN NOT APPRECIATING THE FACT THAT PROVISO TO SECTION 44DA BROUGHT ABOUT BY THE FINANCE ACT 2011 WAS ONLY CLARIFICATORY IN NATURE AND ITS APPLICATION HAS TO BE READ INTO ITA NO. 173/DEL/2013 3 THE MAIN PROVISIONS, IN VIEW OF THE DECISION OF THE APEX COURT IN THE CASE OF SEDCO FOREX INTERNATIONAL DRILLING V /S CIT. 6. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE THE CIT(A) HAS ERRED IN NOT ADJUDICATING THE ISSUE OF T AXABILITY OF GROSS RECEIPTS ACCRUING TO ASSESSEE AGAINST PRO DAT A BASIS OFFERED BY ASSESSEE ON MERITS, HOLDING THAT AO'S AC TION IS UPHELD ONLY FOR THE PURPOSE OF 44 BB COMPUTATION. 7. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE THE CIT (A) HAS ERRED IN RELYING UPON THE DECISION OF T HE ITAT IN THE CASE OF MLS CGG VERITAS SERVICES, SA IN ITA NO. 46531DEL/2010 WHICH HAS NOT BEEN ACCEPTED BY THE DEPARTMENT AND AGAINST WHICH APPEAL TO THE HON'BLE UTTARAKHAND HIGH COURT IS BEING FILED. 8. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE THE CIT (A) HAS ERRED IN HOLDING THAT INTEREST UNDER SE CTION 234B WAS NOT CHARGEABLE IN THIS CASE BY RELYING UPON THE DECISION OF HON'BLE UTTRAKHAND HIGH COURT IN THE CASE OF MAE RSK (334 ITR 79) WHERE AS THE DEPARTMENT HAS CONTESTED THE I SSUE AND HAS FILED SLP BEFORE THE APEX COURT AGAINST IN THE CASE OF JACOBS CIVIL INCORPORATED/ MITSUBISHI INVOLVING SIM ILAR ISSUE. 9. THE APPELLANT PRAYS FOR LEAVE TO ADD, AMEND, MOD IFY OR ALTER ANY GROUNDS OF APPEAL AT THE TIME OF BEFORE T HE HEARING OF THE APPEAL. ITA NO. 173/DEL/2013 4 2. FACTS NARRATED BY THE REVENUE AUTHORITIES ARE N OT DISPUTED BY BOTH THE PARTIES, THEREFORE, NEED NOT BEEN REPEATED HER E FOR THE SAKE OF BREVITY. 3. AT THE TIME OF HEARING, LD. COUNSEL OF THE ASSES SEE, SHRI AMIT ARORA, ADVOCATE HAS STATED THAT THE SIMILAR ISSUES IN DISPUTE HAVE ALREADY BEEN ADJUDICATED AND DECIDED BY THE ITAT G BENC H, NEW DELHI IN ASSESSEES OWN CASE IN ITA NO. 1811/DEL/2013 (AY 20 09-10) VIDE ORDER DATED 17.4.2015. HE FURTHER STATED THAT HONBLE HIG H COURT OF UTTRAKHAND AT NAINITAL IN A GROUP CASES IN INCOME TAX APPEAL NO. 68 OF 2014 & ORS. VIDE JUDGMENT DATED 6 TH AUGUST, 2015 IN WHICH THE ASSESSEE WAS ALSO THE PARTY WHEREIN THE HONBLE HIGH COURT HAS DECIDE D THE ISSUES IN FAVOUR OF THE ASSESSEE. THEREFORE, HE REQUESTED THAT THE ISSUES INVOLVED IN THE PRESENT APPEALS ARE SQUARELY COVERED BY THE ITAT DE CISION DATED 17.4.2015 AS WELL AS HONBLE HIGH COURT OF UTTARAKH AND JUDGEMENT DATED 6.8.2015, HENCE, THE PRESENT APPEAL FILED BY THE REVENUE MAY BE DISMISSED BY UPHOLDING THE ORDER OF THE LD. CIT(A) . 4. ON THE CONTRARY, LD. DR RELIED UPON THE ORDER OF THE ASSESSING OFFICER AND REITERATED THE CONTENTION RAISED IN THE GROUNDS OF APPEAL, RAISED BY THE DEPARTMENT. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD, ESPECIALLY THE IMPUGNED ORDER PASSED BY THE LD. CIT(A) ALONGWITH THE ORDER PASSED BY THIS BENCH AS STATED IN PARA 3 AS AFORESAID. WE ARE OF THE VIEW THAT THE LD. FIRST AP PELLATE AUTHORITY HAS ELABORATELY DEALT THE ISSUES AT PAGE 9 TO 11 VID E PARA NO. 4.0 TO 5.0 ITA NO. 173/DEL/2013 5 VIDE HIS IMPUGNED ORDER DATED 25.10.2012 AND DECIDE D THE ISSUES IN DISPUTE IN FAVOR OF THE ASSESSEE. FOR THE SAKE OF CONVENIENCE, THE RELEVANT PARAGRAPH NO. 4.0 TO 5.0 OF THE IMPUGNED O RDER IS REPRODUCED HEREUNDER:- 4.0 THE FIRST GROUND CHALLENGES THE ACTION OF LD. AO IN ADDING A SUM OF RS 7,59,13,253 TO THE GROSS RECEIPTS WHICH THEN HAS BEEN CONSIDERED FOR THE PURPOSES OF COMPUTATION OF INCOME. THE AO FOUND THAT THE APPELLANT HAD OFFERED RECEIPT S FOR SOME MONTHS ON PRO-RATA BASIS AND NOT ON THE BASIS OF AC TUAL RECEIPTS. THE LD. AO THEN PROCEEDED TO WORK OUT THE TOTAL RECEIPTS AND THE RESULTANT WAS CONSIDERED FOR COMPU TATION OF INCOME AS ROYALTY. 4.1 THE LD ARS HAVE ASSAILED THIS ACTION (OF TAXIN G REVENUES CLAIMED AS ACCRUING OUTSIDE INDIA) AS UNDER: 2.1. 'CONTENTION OF THE APPELLANT 2.3.1 FOR THE PREVIOUS YEAR RELEVANT TO ASSESSMENT YEAR 2008-09, THE ASSESSEE HAD DERIVED REVENUES UNDER A TIME CHARTERED AGREEMENT DATED OCTOBER 27, 2005 FROM EMG S WHICH IS ON ACCOUNT OF PROVIDING VESSEL AND SERVICE S IN CONNECTION WITH PROSPECTING FOR, OR EXTRACTION OR P RODUCTION OF MINERAL OILS. 2.3.2 AS PER SECTION 9(1) OF THE INCOME TAX ACT, 1 956; THE FOLLOWING INCOMES SHALL BE DEEMED TO ACCRUE OR ARISE IN INDIA- (I) 'ALL. INCOME ACCRUING OR ARISING, WHETHER DIR ECTLY OR INDIRECTLY, THROUGH OR FROM ANY BUSINESS CONNECT ION IN INDIA, OR THROUGH OR FROM ANY PROPERTY IN INDIA, OR THROUGH OR FROM ANY ASSET OR SOURCE OF INCOME IN INDIA OR THRO UGH THE TRANSFER OF A CAPITAL ASSET ITA NO. 173/DEL/2013 6 SITUATE IN INDIA.' 'FURTHER, EXPLANATION TO SECTION 9(1)(I) OF THE ACT , PROVIDES THAT IN THE CASE OF A BUSINESS OF WHICH ALL THE OPE RATIONS ARE NOT CARRIED OUT IN INDIA, THE INCOME OF THE BUSINES S DEEMED UNDER THIS CLAUSE TO ACCRUE OR ARISE IN INDIA SHALL BE ONLY SUCH PART OF THE INCOME AS IS REASONABLY ATTRIBUTABLE TO THE OPERATIONS CARRIED OUT IN INDIA.' (VII) INCOME BY WAY OF FEES FOR TECHNICAL SERVICE S PAYABLE BY- (A) THE GOVERNMENT; OR (B) A PERSON WHO IS A RESIDENT, EXCEPT WHERE THE FEES ARE PAYABLE IN RESPECT OF SERVICES UTILIZED IN A B USINESS OR PROFESSION CARRIED ON BY SUCH PERSON OUTSIDE INDIA OR FOR THE PURPOSES OF MAKING OR EARNING ANY INCOME FROM ANY S OURCE OUTSIDE INDIA; OR (C) A PERSON WHO IS A NON- RESIDENT. WHERE THE FE ES ARE PAYABLE IN RESPECT OF SERVICES UTILISED IN A BU SINESS OR PROFESSION CARRIED ON BY SUCH PERSON IN INDIA OR (O R THE PURPOSES OF MAKING OR EARNING ANY INCOME FROM ANY S OURCE IN INDIA: 2.3.3 SECTION 9(1)(I) READ WITH EXPLANATION I AND S ECTION 9(1)(VII) OF THE ACT DEFINES THE SCOPE FOR TAXABILI TY OF INCOME EARNED BY FOREIGN COMPANIES. UNDER BOTH THE SECTION , INCOME OF THE NON-RESIDENT IS DEEMED TO ACCRUE OR ARISE IN INDIA ONLY WHERE THE OPERATIONS ARE CARRIED OUT IN INDIA OR SE RVICES UTILIZED IN A BUSINESS/PROFESSION CARRIED ON BY SUC H PERSON IN INDIA OR FOR THE PURPOSE OF EARNING ANY INCOME FROM ANY SOURCE IN INDIA. ITA NO. 173/DEL/2013 7 2.3.4 IN THE PRESENT CASE, ASSESSEE HAS GIVEN VESSE LS ON TIME CHARTER BASIS TO EMGS. IT S RESPECTFULLY SUBMITTED THAT SINCE THE VESSEL WAS PHYSICALLY OUTSIDE INDIA FOR NOVEMBE R 2007 (26 DAYS) TO JANUARY 2008 (15 DAYS) IT CAN BE ARGUE D THAT THE BUSINESS ACTIVATES WAS OUTSIDE INDIA, THE SERVICES ARE UTILIZED OUTSIDE INDIA AND THE SOURCE OF INCOME IS ALSO OUTS IDE INDIA. THEREFORE THE REVENUES RECEIVED BY THE ASSESSEE FOR THIS PERIOD DOES NOT ACCRUE OR ARISE IN INDIA AND HENCE IS NOT TAXABLE IN INDIA. 2.3.5 DOCUMENTARY EVIDENCE EXPLAINING WHY REVENUES FOR NOVEMBER 2007 (26 DAYS) TO JANUARY 2008 (15 DAYS) H AVE BEEN PRORATED AND NOT OFFERED IN FULL IS ENCLOSED I N 'ANNEXURE I' 2.3.6 IN THIS CONNECTION, ATTENTION IS INVITED TO THE FOLLOWING DECISIONS / RULINGS WHERE IT HAS BEEN HELD THAT MOB ILIZATION CHARGES RECEIVED BY THE FOREIGN COMPANY WOULD BE TA XABLE IN INDIA ONLY TO THE EXTENT THE SAME RELATES TO THE DI STANCE TRAVELLED BY THE EQUIPMENT WITHIN THE INDIAN TERRIT ORIAL WATERS (I.E. 200 NAUTICAL MILES FROM THE APPROPRIATE BASE LINE) AND CONSEQUENTLY MOBILIZATION CHARGES RECEIVED TOWARDS TRAVEL OF EQUIPMENTS BEYOND SUCH TERRITORIAL WATERS WILL NOT BE TAXABLE IN INDIA. DECISION OF THE HON'BLE MUMBAI TRIBUNAL IN CASE OF ACIT V JINDAL DRILLING LEASING 'INCOME FROM TRANSPORTING T HE RIG HAS OCCURRED TO THE ASSESSEE'S OR HAS ARISEN TO IT ONLY WHEN THE TRANSPORTATION HAS TAKEN PLACE AND THAT TRANSPORTAT ION WAS BOTH IN INDIA AS WELL AS OUTSIDE INDIA. ACCRUAL OF INCOME IN INDIA WOULD, THEREFORE, BE ONLY FOR THE PORTION OF THE VOYAGE WHICH PERTAINED TO THE TRAVEL IN INDIA. THE BALANCE AMOUNT WOULD ACCRUE AND IS PAYABLE TO THE NON-RESIDENT FOR THE ITA NO. 173/DEL/2013 8 TRANSPORTATION OUTSIDE INDIA AND THEREFORE, THE REC EIPTS THEREOF WOULD NOT BE COVERED BY THE PROVISIONS OF S ECTION 44BB OF THE ACT'. 4.2 TO BEGIN WITH IT HAS ALREADY BEEN HELD THAT THI S CASE SHOULD BE DEALT WITH U/S 44BB OF THE ACT. THEN THE ISSUE TO BE DECIDED HERE WOULD BE WHETHER THE APPELLANT CAN HAVE HIS INCOME 'DIVIDED INTO RECEIPTS ACCRUING OUTSIDE INDI A (AND HENCE NOT TAXABLE) AND RECEIPTS ACCRUING INSIDE IND IA (TAXABLE). IT MAY BE MENTIONED THAT THIS POSITION I S NOT TENABLE CONSIDERING THAT U/S. 44BB OF THE ACT, THE RE IS AN EXPRESS MANDATE TO TAX GLOBAL RECEIPTS PERTAINING T O ANY CONTRACT HAVING A PROXIMATE NEXUS WITH THE ACTIVIT Y OF PROSPECTING FOR OR EXTRACTION OF MINERAL OILS IN IN DIA. IN THE CASE OF SEDCO FOREX INTL, INC. REPORTED IN 299 ITR 238 (UK) THE HON'BLE UTTARAKHAND HIGH COURT HAS INTERPRETED SEC. 44BB OF THE ACT AS UNDER:- 'SECTION 44BB DOES NOT TAKE INTO ACCOUNT THE INCOME FOR CALCULATING THE AGGREGATE AMOUNT TO CALCULATE 10 PER CENT PROFITS AND GAINS. PROFITS AN D GAINS ARE TYPES OF INCOMES TO BE TAXED UNDER A LEGAL FICTION, I.E., AT 10 PER CENT OF THE AMOUNT SPECIFIED IN SUB-SECTION (2) OF SECTION 44BB. SECTION 44BB IS A SPECIAL PROVISION RELATING TO THE NON-RESIDENT ASSESSEE, WHO IS PROVIDING SERVICES AND FACILITIES IN CONNECTION WITH, OR SUPPLY OF PLA NT AND MACHINERY ON HIRE USED, OR TO BE USED, IN THE PROSPECTING FOR, OR EXTRACTION OR PRODUCTION OF, MINERAL OILS IN OR OUTSIDE INDIA. THE SECTION IS A COMPLETE CODE IN ITSELF. THE AMOUNTS REFERRED TO IN SUB-SECTION (2) OF SECTION 44BB ARE FOUR TYPES OF AMOUNTS ALL OF WHICH ARE MUTUALLY INCLUSIVE AND ITA NO. 173/DEL/2013 9 EITHER ALL OF THEM OR ANY OF THEM AND ITS CLAUSES THEMSELVES PROVIDE WHETHER THE PAYMENT TO BE TAKEN INTO ACCOUNT HAS BEEN MADE INSIDE INDIA OR OUTSIDE INDIA.' THIS INTERPRETATION HAS BEEN FURTHER ELABORATED IN THE CASE OF CIT DEHRADUN VS. R&B FALCON DRILLING CO. REPORTED I N 181 TAXMAN 62 (UK). ATTENTION IS INVITED TO PARA 6 OF T HIS JUDGMENT WHERE IT HAS BEEN SPECIFICALLY LAID DOWN T HAT THE MOMENT A CLAIM IS SUBMITTED FOR TAXABILITY U/S 44BB OF THE ACT, THE ENTIRE RECEIPTS, INCLUDING THE SUMS PAID O R PAYABLE, WHETHER IN OR OUTSIDE INDIA, TO THE ASSESSEE OR TO ANY PERSON ON HIS BEHALF ON ACCOUNT. OF PROVISION OF SERVICES AND FACILITIES IN CONNECTION WITH OR SUPPLY OF PLANT & MACHINERY U SED ON HIRE, OR TO BE USED IN THE PROSPECTING FOR OR EXTRA CTION OR PRODUCTION OF MINERAL OILS IN INDIA, WILL BE TAXABL E. FURTHERMORE, THIS INTERPRETATION HAS FURTHER BEEN R ELIED ON BY THE HON'BLE AAR, DELHI IN THE CASE OF WESTERN GECO INTI. LTD. [AAR NO.938 OF 2010 DATED 25.07.2011) REPORTED IN 2 01 TAXMAN 101 (AAR-DELHI)]. KEEPING IN VIEW THE ABOVE POSITION OF LAW, IT IS HE LD THAT THE ENTIRE RECEIPTS ACCRUING TO THE APPELLANT ON BEHALF OF THE CONTRACT WITH M/S EMGS SHALL BE TREATED AS RECEIPTS FOR THE PURPOSE OF COMPUTING INCOME U/S 44BB OF THE ACT AND THE ACTION OF LD. AO IN WORKING OUT THE FULL QUANTUM OF RECEIPTS BY ADDING THE IMPUGNED AMOUNT, IS UPHELD (THOUGH FOR. THE PURPOSES OF SECTION 44 BB COMPUTATION). 5.0 GROUND NUMBER 3 CHALLENGES THE CHARGING OF INT EREST U/S. 234B AND 234D OF THE ACT. THE ISSUE OF CHARGING U/S . 234B OF THE ACT IS COVERED IN FAVOUR OF THE APPELLANT BY TH E CASE OF MAERSK COMPANY REPORT IN 334 ITR 79 (UK). THE INTER EST U/S. ITA NO. 173/DEL/2013 10 234D OF THE ACT WOULD BE CONSEQUENTIAL AFTER GIVING EFFECT TO THIS APPELLATE ORDER. 6.0 I THE RESULT, THE APPEAL IS PARTLY ALLOWED. 5.1 WE ALSO FIND THAT THE TRIBUNAL IN ASSESSEES OW N CASE IN ITA NO. 1811/DEL/2013 (AY 2009-10) VIDE ORDER DATED 17.4.20 15 HAS ADJUDICATED THE SIMILAR ISSUES AND DECIDED THE SAME IN FAVOUR O F THE ASSESSEE. THE RELEVANT PARAS 5 TO 6 ARE REPRODUCED HEREUNDER FOR THE SAKE OF CONVENIENCE. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED TH E RELEVANT MATERIAL ON AVAILABLE ON RECORD, ESPECIALL Y THE IMPUGNED ORDER PASSED BY THE LD. CIT(A) ALONGWITH T HE ORDER PASSED BY THIS BENCH AS STATED IN PARA 3 AS AFORE SAID. WE ARE OF THE VIEW THAT THE LD. FIRST APPELLATE AUTHOR ITY HAS DEALT THIS ISSUE AT PAGE 3 VIDE PARA NO. 4.0 & 5.0 WHER EIN HE HAS FOLLOWED HIS OWN ORDER RELEVANT FOR THE ASSTT. YEA R 2008-09 AND DECIDED THE ISSUE IN DISPUTE IN FAVOR OF THE AS SESSEE. FOR THE SAKE OF CONVENIENCE, THE RELEVANT PARAGRAPH NO. 4.0 & 5.0 OF THE IMPUGNED ORDER IS REPRODUCED HEREUNDER:- 4.0 THE FIRST GROUND OF APPEAL CHALLENGES THE ACTION OF THE LD. AO IN ASSESSING INCOME AS ROYALTY RATHER THAN U/S 44BB OF THE ACT. THE LD. AR PLACED ON RECORD A COPY OF THE APPELLATE ORDER IN THE APPELLANTS OWN CASE FOR A.Y. 2008- 09 (APPEAL NO. 277/CIT(A)-II/2011-12, ORDER DATED 25.10.2012] IN WHICH ON IDENTICAL FACTS THE INCOME HAS BEEN HELD ASSESSABLE U/S. 44BB OF THE ACT ON THE ENTIRE RECEIPTS (GROSS). SINCE THE FACTS ARE THE SAME IN THE PRESENT APPEAL, THE INCOME IS DIRECTED TO BE ASSESSED U/S. 44BB OF THE ITA NO. 173/DEL/2013 11 ACT BY ADOPTING THE GROSS RECEIPTS FOR WORKING OUT TAXABLE INCOME. 5.0 THE SECOND GROUND CHALLENGES THE LEVY OF INTEREST U/S. 234B OF THE ACT. THIS ISSUE IS COVERED IN FAVOR OF THE APPELLANT DUE TO THE CASE OF MAERSK COMPANY LTD. REPORTED IN 334 ITR 79 (UK). 5.1 AFTER GOING THROUGH THE FINDINGS GIVEN BY THE L D. CIT(A) IN THE IMPUGNED ORDER AS WELL AS THE ORDER P ASSED BY THE ITAT, C BENCH, NEW DELHI IN A GROUP CASES, IN WHICH THE ASSESSEE WAS ALSO THE PARTY IN ITA NO. 5633/DEL/201 0 (A.Y. 2007-08) SIEM OFFSORE INC. C/O EMGEE CORPORATION VS . ADDL. DIT (INTL. TAXATION) VS. ADDL. DIT (INTL. TAXATION) DECIDED ON 11.6.2014, WE ARE OF THE CONSIDERED VIEW THAT THE I SSUE IN DISPUTE HAS ALREADY BEEN ADJUDICATED AND DECIDED BY THIS BENCH IN ASSESSEES OWN CASE, IN ITS FAVOR FOR THE ASSTT. YEAR 2007-08 IN ITA NO. 5633/DEL/2010 (A.Y. 2007-08) DEC IDED ON 11.6.2014. RESPECTFULLY, FOLLOWING THE ORDER OF THE COORDINATE BENCH, THE APPEAL FILED BY THE REVENUE IS DISMISSED . WE DIRECT THE AO THAT THE INCOME OF THE ASSESSEE IS TO BE ASSESSED U/S. 44BB OF THE ACT BY ADOPTING THE GROSS RECEIPTS FOR WORKING OUT TAXABLE INCOME. 5.2 AS REGARDS ANOTHER ISSUE REGARDING LEVY OF INTE REST U/S. 234B OF THE I.T. ACT. WE FIND THAT THIS ISSU E IS ALSO COVERED IN FAVOR OF THE ASSESSEE DUE TO THE CASE OF MAERSK COMPANY LTD. REPORTED IN 334 ITR 79 (UK). 5.3 KEEPING IN VIEW OF THE AFORESAID DISCUSSIONS AN D PRECEDENT, WE ARE OF THE CONSIDERED VIEW THAT THE O RDER OF THE LD. CIT(A) IS A WELL REASONED ORDER, WHICH DOES NOT NEED ANY ITA NO. 173/DEL/2013 12 INTERFERENCE ON OUR PART, HENCE, WE UPHOLD THE SAME ON THE ISSUES IN DISPUTE, AS AFORESAID. 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE S TANDS DISMISSED. 5.2 WE FURTHER FIND CONSIDERABLE COGENCY IN THE LD. COUNSEL OF THE ASSESSEES CONTENTION THAT THE AFORESAID TRIBUNALS ORDER DATED 17.4.2015 AND THE HONBLE HIGH COURT OF UTTRAKHAND AT NAINITA L IN A GROUP CASES IN INCOME TAX APPEAL NO. 68 OF 2014 & ORS. VIDE JUDGME NT DATED 6 TH AUGUST, 2015 IN WHICH THE ASSESSEE WAS THE PARTY W HEREIN THE HONBLE HIGH COURT HAS DECIDED THE ISSUE IN FAVOUR OF THE A SSESSEE. FOR THE SAKE OF CONVENIENCE, THE RELEVANT PORTION OF THE AFORESA ID JUDGMENT OF THE HONBLE HIGH COURT OF UTTARAKHAND IS REPRODUCED HER EUNDER:- 2. THE MAIN SUBSTANTIAL QUESTION OF LAW, WHICH WOU LD ARISE IN ALL THESE APPEALS, RELATE TO THE ASSESSABILITY O F THE AMOUNTS UNDER SECTION 44BB OF THE INCOME TAX ACT. 3. WE HAVE HEARD THE LEARNED COUNSEL FOR THE PARTIE S. 4. IN THE LIGHT OF THE JUDGMENT OF THE HONBLE APEX COURT IN CIVIL APPEAL NO. 731 OF 2007 AND CONNECTED CASE (OIL & NATURAL GAS CORPORATION LIMITED VS. COMMISSIONER OF INCOME TAX & ANOTHER), THE SUBSTANTIAL QUESTIONS OF LAW RELATING TO THE ASSESSABILITY OF THE AMOUNTS UNDER SECTION 44BB HAVE TO BE ANSWERED AGAINST THE APPELLANT/REVENUE. ACCORDINGLY, WE ANSWER THE SAI D ITA NO. 173/DEL/2013 13 QUESTIONS OF LAW AGAINST THE REVENUE IN THE LIGHT O F THE AFORESAID JUDGMENT OF THE HONBLE APEX COURT. 5. THERE REMAIN TWO FURTHER SUBSTANTIAL QUESTIONS OF LAW, WHICH REVOLVE AROUND THE FINDING OF THE TRIBUNAL TH AT THERE IS NO LIABILITY TO PAY INTEREST UNDER SECTION 234B OF THE INCOME TAX ACT. THE LEARNED COUNSEL FOR THE REVENUE WOULD, IN FACT, SUBMIT THAT THE QUESTION M AY HAVE TO BE RE-DONE BY THE ASSESSING OFFICER AS TO WHETHER THERE IS LIABILITY TO PAY INTEREST UNDER SE CTION 234B EVEN ON THE BASIS OF ANSWERING ALL THE SUBSTA NTIAL QUESTIONS OF LAW AGAINST THE REVENUE. 6. IN SUCH CIRCUMSTANCES, THE APPEALS ARE DISPOSED OF AS FOLLOWS: (I) WE ANSWER THE QUESTIONS OF LAW RELATING TO THE ASSESSABILITY OF THE AMOUNTS UNDER SECTION 44BB AGAINST THE REVENUE. (II) IN RELATION TO THE SUBSTANTIAL QUESTIONS OF LA W RELATING TO SECTION 234B, WE REMIT THE MATTER BACK TO THE ASSESSING OFFICER TO CONSIDER WHETHER THERE IS ANY LIABILITY UNDER SECTION 234B ON THE BASIS THAT THE AMOUNTS IN QUESTION WOULD FALL TO BE ASSESSED UNDER SECTION 44BB OF THE ACT. ITA NO. 173/DEL/2013 14 6. IN THE BACKGROUND OF THE AFORESAID DISCUSSIONS A ND RESPECTFULLY FOLLOWING THE PRECEDENTS OF THE ITAT AND THE HONBL E HIGH COURT OF UTTARAKHAND, AS AFORESAID, WE ARE OF THE VIEW THAT THE LD. CIT(A) HAS PASSED A WELL REASONED ORDER WHICH DOES NOT NEED AN Y INTERFERENCE ON OUR PART, HENCE, WE UPHOLD THE SAME. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 08/07/2016. SD/- SD/- [O.P. KANT] [H.S. SIDHU] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 08/07/2016 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES