CANYON OFFSHORE INC., NEW DELHI V. ADIT (IT) 1(2), MUMBAI

ITA 2396/MUM/2013

• Counselvise Citation: 239619914 RSA 2013
• Duration Of Justice: 1 year(s) 9 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-01-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 01-01-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 28-03-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: N K CHAND
• Assessee Lawyers: NE ERAJ AGARWALA
• Keywords: Advance ruling

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE HONBLE S/SHRI H.L. KARWA, PRESIDENT AND B. R.BASKARAN (AM) . . , . . , ./ I.T.A. NO.2396/MUM/2013 ( / ASSESSMENT YEAR :2009-10) CANYON OFFSHORE INC. C/O NANGIA AND COMPANY, SUITE 4A, PLAZA M-6, JASOLA, NEW DELHI-110025. / VS. ASSTT. DIRECTOR OF INCOME TAX (INTERNATIONAL TAXATION)-1(2), SCINDIA HOUSE, BALLARD PIER, MUMBAI-400001 ( / APPELLANT) .. ( ! / RESPONDENT) ./ #$ ./ PAN/GIRNO.:AADCC2922M % / APPELLANT BY : SHRI NEERAJ AGARWALA ! & % / RESPONDENT BY SHRI N K CHAND. ' ( & ) * / DATE OF HEARING : 1.1.2015 +, & ) * /DATE OF PRONOUNCEMENT : 16.01.2015 / O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER DATED 13.12.2012 PASSED BY LD CIT(A)-10, MUMBAI AND IT RELATES TO THE ACT FOR ASSESSMENT YEAR 2009-10. 2. THE ASSESSEE IS AGGRIEVED BY THE DECISION OF THE LD. CIT(A) IN UPHOLDING THE ORDER OF AO THAT THE AMOUNT RECEIVED ON ACCOUNT OF MOBILIZATION OF VESSALS OUTSIDE INDIAN TERRITORIAL WATERS WAS FORMING PART OF GROSS RECEIPTS FOR THE PURPOSE OF DETERMINATION OF INCOME U/S 44BB OF THE INCOME TAX ACT, 1961 (THE ACT). ITA NO.2396/MUM/2013 2 3. WE HAVE HEARD THE PARTIES AND PERUSED THE RECORD . WE NOTICE THAT THE LD. CIT(A) HAS FOLLOWED THE DECISION RENDERED B Y THE HONBLE UTTARAKHAND HIGH COURT IN THE CASE OF CIT V/S HALL IBURTON OFFSHORE SERVICES INC. (300 ITR 2651) AND CIT V/S SEDCO FOR EX INTL. DRILLING INC (299 ITR 238), IN DECIDING THE ISSUE AGAINST THE AS SESSEE. FOR THE SAKE OF CONVENIENCE, WE EXTRACT BELOW THE RELEVANT OBSERVAT IONS AND FINDING OF LD. CIT(A) WHILE UPHOLDING THE DECISION OF THE AO: 2. THE ASSESSEE IS A NON-RESIDENT ENGAGED IN PROVI DING SERVICES AND FACILITIES SUCH AS SUPPLY OF PLANT AND MACHINER Y ON HIRE IN CONNECTION WITH OIL EXPLORATION ACTIVITIES. IT IS RESIDENT OF USA AND HAS OFFERED ITS INCOME TO THE EXTENT OF RS.194,05,7 7,139/- UNDER THE PROVISIONS OF SECTION 44BB OF THE ACT. THE AO NOTI CED THAT THE ASSESSEE HAS NOT INCLUDED A SUM OF RS.25,82,65,23 8/- WHICH WAS INCURRED ON ACCOUNT OF MOBILIZATION AS PART OF ITS TAXABLE RECEIPTS U/S 44BB OF THE ACT. IN RESPECT OF THIS AMOUNT, THE ASS ESSEE RELIED UPON THE DECISIONS OF THE TRIBUNAL IN THE CASE OF SAIPE M SPA V/S DCIT (83 ITD 213), DCIT V/S SONATA OFFSHORE DRILLING I NC. IN ITA NO.741/B/94, R AND F FALCON DRILLING CO. V/S A CIT (14 SOT 281) AND CONTENDED THAT THE MOBILIZATION CHARGES ARE IN THE NATURE OF REIMBURSEMENT, AND HENCE NEED NOT BE CONSIDERED FOR THE PURPOSES OF SECTION 44BB. THE ASSESSEE, AT THE SAME TIME, ADMITTED THAT THE HONBLE UTTARAKHAND HIGH COURT IN THE CASE OF CIT V/S HALLIBURTON OFFSHORE SERVICES INC. (300 ITR 2651) AND CIT V/S SEDCO FOREX INTL. DRILLING INC (299 ITR 238) HAS HELD THAT MOBILIZATION AND DEMOBILIZATION CHARGE ARE PART OF THE RECEIPTS TO BE CONSIDERED FOR THE PURPOSES OF SECTION 44BB. THE A SSESSEE HAS SUBMITTED THAT IT WISHES TO KEEP THE ISSUE ALIVE AN D RAISE IT AT A HIGHER APPELLATE FORUM EVEN THOUGH THESE DECISIONS OF THE HONBLE COURT ARE AGAINST IT. 3. THE AO ON THE OTHER HAND, HAS RELIED UPON TWO DE CISIONS OF THE HONBLE UTTARAKHAND HIGH COURT REFERRED EARLI ER AND THE RECENT RULING OF THE AUTHORITY FOR ADVANCE RULING (AAR ) IN THE CASE OF WESTERN GECO INTERNATIONAL LIMITED IN AAR NO. 938 O F 2010. RELYING ON THESE DECISIONS, THE AO HAS INCLUDED THE SAID SUM IN THE TOTAL REVENUE CONSIDER4ED U/S 44AB. 4. THE ASSESSEES SUBMISSIONS ARE CONSIDERED. RESPE CTFULLY FOLLOWING THE DECISIONS OF THE UTTARAKHAND HIGH COU RT IN THE ABOVE REFERRED, THE AOS ACTION IN CONSIDERING THIS AMOU NT AS PART OF RECEIPTS U/S 44BB IS UPHELD. ITA NO.2396/MUM/2013 3 4. SINCE, THE LD. IT(A) HAS FOLLOWED THE DECISION O F HONBLE UTTARAKHAND HIGH COURT AND SINCE THE ASSESSEE COULD NOT SHOW AN Y OTHER CONTRARY DECISION, WE DO NOT FIND ANY REASON TO INTERFERE W ITH THE ORDER OF LD. CIT(A). 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 16TH JAN,2015. +, ' - ./ 0 1 16TH JAN 2015 , & 2( 3 SD S D ( . . / H.L. KARWA) ( . . , / B.R. BASKARAN ) / PRESIDENT / ACCOUNTANT MEMBER . ' ( MUMBAI: TH JAN, 2015. . . ./ SRL , SR. PS ! ' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. ! / THE RESPONDENT. 3. ' 7) ( ) / THE CIT(A)- CONCERNED 4. ' 7) / CIT CONCERNED 5. 6. 89 2 ): , * : , . ' ( / DR, ITAT, MUMBAI CONCERNED 2 ; < ( / GUARD FILE. = ' / BY ORDER, TRUE COPY > # (ASSTT. REGISTRAR) * : , . ' ( /ITAT, MUMBAI