ORIENT OVERSEAS CONTAINER LINE LTD, MUMBAI V. DCIT (IT) 3(2)(2), MUMBAI

ITA 2420/MUM/2017

• Counselvise Citation: [2018] 112 COUNSELVISE.COM (IT) 5627 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-11-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2013-2014
• Appeal Filed On: 06-04-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: M NAVEEN
• Assessee Lawyers: SHRADDHA SWARUP
• Keywords: Presumptive income; Opportunity of being heard; Initiation of penalty proceedings; TDS; Set aside
• Section: 271(1)(c); 143(3); 201; 144C; 44BB; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES C , MUMBAI BEFORE S HRI B.R. BASKARAN (AM) AND SHRI RAM LAL NEGI (JM) ITA NO. 2420/MUM/2017 ASSESSMENT Y EAR: 2013 - 14 M/S ORIENT OVERSEAS CONTAINER LINE LIMITED, C/0 OOCL (INDIA) PRIVATE LIM I TED, SAKI V IHAR ROAD, OPP. SANTOGEN SILK MILLS POWAI, MUMBAI - 400072 PAN: AAACO5679E VS. THE DEPUTY COMMISSIONER OF INCOME TAX (INTERNATIONAL TAXATION) - 3(2)(2), ROOM NO. 1615, 16 TH FLOOR, AIR INDIA BUILDING, NARIMAN POINT, MUMBAI - 400021 (APPELLANT) ( RESPONDENT) ASSESSEE BY : MS. SHRADDHA SWARUP (A R) REVENUE BY : SHRI M. NAVEEN (DR) DATE OF HEARING: 27 / 08 /201 8 DATE OF PRONOUNCEMENT: 20 / 11 /201 8 O R D E R PER RAM LAL NEGI, JM THI S APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE DCIT (INTERNATIONAL TAXATION) 3 (2)(2) MUMBAI, PASSED U/S 143(3) READ WITH SECTION 144(13) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT) PURSUANT TO THE DIRECTIONS ISSUED BY THE DISPUTE R ESOLUTION PANEL - 2 (FOR SHORT THE DRP ) , MUMBAI, PERTAINING TO THE ASSESSMENT YEAR 2013 - 14 . 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE COMPANY INCORPORATED IN HONG K ONG IS ENGAGED IN THE BUSINESS OF TRANSPORTATION OF CARGO AND OPERATION OF SHIPS IN INTERNATIONAL TRAFFIC . THE ASSESSEE HAVING INCOME FROM FREIGHT AND ANCILLARY CHARGES SUCH AS TERMINAL HANDLING CHARGES, INLAND HAULAGE CHARGES, DEMURRAGE AND DETENTION CHARGES ETC., FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER CONSIDERATION DEC LARING THE TOTAL INCOME OF RS. 2 ITA NO. 2420 MUM/2017 ASSESSMENT YEAR: 2013 - 14 76,88,21,960/ - . THE DRAFT ASSESSMENT ORDER WAS PASSED U/S 143 ( 3) R.W.S. 144C (13) OF THE ACT. AGGRIEVED BY THE DRAFT ASSESSMENT ORDER, THE ASSESSEE FILED OBJECTIONS BEFORE THE L D. DISPUTE RESOLUTION PANEL (DR P ) - 2, MUMBAI A LONG WITH FORM 35 - A IN RESPECT OF VARIATIONS MADE BY THE ASSESSING OFFICER IN THE DRAFT ORDER. THE LD. DRP AFTER HEARING THE ASSESSEE ISSUED D IRECTION U/S 144C(5) OF THE ACT. 3 . THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST THE ASSESSMENT ORDER PASSE D BY THE DCIT PURSUANT TO THE DIRECTION S ISSUED BY THE LD. DRP ON THE FOLLOWING EFFECTIVE GROUNDS : - 1. GROUND NO. 1: INCLUSION OF SERVICE TAX FOR THE PURPOSE OF COMPUTING PRESUMPTIVE INCOME UNDER SECTION 44B OF THE INCOME TAX ACT, 1961 (THE ACT). 1.1 ON THE F ACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED DCIT HAS ERRED IN INCLUDING AN AMOUNT OF RS. 47,52,66,155/ - BEING THE AMOUNT OF SERVICE TAX COLLECTED AND PAID TO THE GOVERNMENT, TO THE TOTAL REVENUE FOR THE PURPOSE OF COMPUTING PRESUMPTIV E INCOME UNDER SECTION 44B OF THE ACT. 1.2 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED DCIT HAS ERRED IN IN NOT FOLLOWING THE ORDER PASSED BY THE MUMBAI BENCH OF HONBLE INCOME TAX APPELLATE TRIBUNAL (ITAT) IN APPELLANTS OWN CASE FOR A Y 2007 - 08, AY 2008 - 09 AND AY 2010 - 11 WHEREIN IT HAS BEEN HELD THAT SERVICE TAX COLLECTED AND PAID TO THE GOVERNMENT BY THE APPEL L ANT IS NOT INCLUDIBLE FOR THE PURPOSE OF COMPUTING PRESUMPTIVE INCOME UNDER SECTION 44B OF THE ACT. 1.3 THE APPELLANT HUMB LY PRAYS THAT THE LEARNED DCIT BE DIRECTED NOT TO INCLUDE SERVICE TAX COLLECTED AND PAID TO THE GOVERNMENT FOR THE PURPOSE OF COMPUTING THE PRESUMPTIVE INCOME UNDER SECTION 44B OF THE ACT. 2. GROUND 2: SHORT GRANT OF CREDIT OF TAX DEDUCTED AT SOURCE (T DS) 3 ITA NO. 2420 MUM/2017 ASSESSMENT YEAR: 2013 - 14 2.1 ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED DCIT ERRED IN RESTRICTING THE CREDIT OF TAX DEDUCTED AT SOURCE (TDS) TO RS. 3,68,08,427/ - AS AG A INST AN AMOUNT OF RS. 3,68,18,056 AS CLAIMED BY THE ASSESSEE IN ITS RETURN OF INCO ME (ROI) FILED FOR AY 2013 - 14, THEREBY RESULTING INTO A SHORT CREDIT FOR TDS OF RS. 9,629. 2.2 FURTHER, THE APPELLANT IS IN THE PROCESS OF FILING AN APPLICATION UNDE R SECTION 154 OF THE ACT FOR RECTIFICATION OF THE AFORESAID MI S TAKE APPARENT FROM RECORD BEFOR E THE LEARNED DCIT. 2.3 THE APPELLANT PRAYS THAT THE LEARNED DCIT BE DIRECTED TO GRANT THE FULL CREDIT OF TDS. 3. GROUND 3: SHORT GRANT OF CREDIT OF PREPAID TAXES (I.E. ADVANCE TAX AND SELF - ASSESSMENT TAX) 3.1 ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED DCIT ERRED IN RESTRICTING THE CREDIT OF PREPAID TAXES (I.E. ADVANCE TAX AND SELF - ASSESSMENT TAX) TO RS. 32,66,80,448/ - AS AGAINST AN AMOUNT OF RS. 32,81,24,445 AS CLAIMED BY THE APPELLANT IN ITS RETURN OF INCOME (ROI) FILED FOR AY 2013 - 1 4, THEREBY RESULTING INTO A SHORT CREDIT FOR PREPAID TAXES OF RS. 14,43,997/ - . 3.2 FURTHER, THE APPELLANT IS IN THE PROCESS OF FILING AN APPLICATION UNDER SECTION 154 OF THE ACT FOR RECTIFICATION OF THE AFORESAID MISTAKE APPARENT FROM RECORD BEFORE THE LEARNE D DCIT. 3.3 THE APPELLANT PRAYS THAT THE LEARNED DCIT BE DIRECTED TO GRANT THE FULL CREDIT OF PREPAID TAXES. 4. GROUND 4: INCORRECT LEVY OF INTEREST UNDER SECTION 234C OF THE ACT. 4 ITA NO. 2420 MUM/2017 ASSESSMENT YEAR: 2013 - 14 4.1 ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED DCIT ERRE D IN LEVYING INTEREST OF RS. 23,361 UNDER SECTION 234C OF THE ACT. 4.2 THE APPELLANT PRAYS THAT THE LEARNED DCIT BE DIRECTED TO DELETE THE INCORRECT INTEREST LEVIED UNDER SECTION 234C OF THE ACT. 5. GROUND 5: INITIATION OF PENALTY PROCEEDING FOR THE LEVY OF PE NALTY UNDER SECTION 271(1)(C) 5.1 ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED DCIT ERRED IN INITIATING PENALTY PROCEEDING UNDER SECTION 271 (1) (C) OF THE ACT. 5.2 IT IS PRAYED THAT THE LEARNED DCIT BE DIRECTED TO DROP THE PENALTY PROC EEDING UNDER SECTION 271(1)(C) OF THE ACT. 4. VIDE GROUND NO. 1, THE ASSESSEE HAS CHALLENGED THE ADDITION OF RS. 3,56,44,962/ - I.E. 7.5% OF THE SERVICE TAX COLLECTED BY THE ASSESSEE. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS NOTICED THAT THE AS SESSEE HAD COLLECTED SERVICE TAX OF RS. 47,52,66,155/ - . THE ASSESSEE CLAIMED THAT THE SAID SERVICE TAX IS NOT INCLUDIBLE IN COMPUTING THE PRESUMPTIVE INCOME U/S 44B OF THE ACT. HOWEVER, THE AO TREATED THE GROSS SERVICE TAX COLLECTED BY THE ASSESSEE AS THE AMOUNT SPECIFIED IN SECTION 44BB(2) AND FURTHER TREATED 7.5% OF THE SAID AMOUNT AS THE ASSESSEES INCOME U/S 44BB(1). THE LD. DRP CONFIRMED THE ADDITION REJECTING THE CONTENTION OF THE ASSESSEE THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE ORD ERS OF THE TRIBUNAL RENDERED IN THE ASSESSEES CASE FOR A.Y. 2007 - 08, 2008 - 09 AND 2011 - 12. 5. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED BEFORE US THAT SINCE THE IDENTICAL ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE ITAT , MUMBAI, IN THE ASSESSEES CASE FOR THE A.YS. 2007 - 08 - 2008 - 09 AND 2011 - 12, 5 ITA NO. 2420 MUM/2017 ASSESSMENT YEAR: 2013 - 14 THEREFORE THE ASSESSMENT ORDER PASSED BY THE DCIT PURSUANT TO THE DIRECTIONS OF THE LD. DRP, IS LIABLE TO BE SET ASIDE. 6. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESENTATIVE (DR) DID NOT CONTROVERT THE FACTS STATED BY THE LD. COUNSEL, HOWEVER, RELYING ON THE IMPUGNED ORDER SUBMITTED THAT THE DEPARTMENT HAS FILED REFERENCE BEFORE THE HONBLE BOMBAY HIGH COURT AGAINST THE DECISION OF THE ITAT, MUMBAI. 7. WE HAVE HEARD THE RIVAL SUBMISSION AND PERUSED THE MATERIAL ON RECORD IN THE LIGHT OF THE RIVAL CONTENTIONS. WE NOTICE THAT THE COORDINATE BENCH OF THE ITAT HAS DECIDED THE IDENTICAL ISSUE IN FAVOUR OF THE ASSESSEE IN THE ASSESSEES OWN CASE FOR THE A.YS. 2007 - 08, 2008 - 09 AND 2010 - 11 . AS P OINTED OUT BY THE LD. COUNSEL THE COORDINATE BENCH HAS DECIDED THE IDENTICAL ISSUE IN FAVOUR OF THE ASSESSEE IN THE ASSESSEES CASE ITA NO. 457/MUM/ 2015 FOR THE A.Y. 2011 - 12 ,BY FOLLOWING THE DECISION OF THE HONBLE DEL HI HIGH COURT AND THE DECISION OF THE COORDINATE BENCHES IN THE ASSESSEES APPEALS FOR A.YS. 2007 - 08, 2008 - 09 AND 2010 - 11. THE RELEVANT PORTION OF THE DECISION READS AS UNDER: - 4.4.1 WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD, INCLUDING THE JUDICIAL PRONOUNCEMENTS CITED. THE QUESTION FOR CONSIDERATION BEFORE US IS WHETHER THE SERVICE TAX COLLECTED BY THE ASSESSEE AND PASSED ON TO THE GOVERNMENT FROM THE PERSON TO WHOM IT HAS PROVIDED SERVICES CAN LEGITIMATELY BE CON SIDERED TO FORM PART OF THE GROSS RECEIPTS FOR THE PURPOSE OF COMPUTATION OF THE ASSESSEES PRESUMPTIVE INCOME UNDER SECTION 44BB OF THE ACT. WE FIND THAT THIS VERY SAME ISSUE HAS BEEN CONSIDERED AND HELD IN FAVOUR OF THE ASSESSEE BY THE DECISIONS OF THE C OORDINATE BENCH OF THIS TRIBUNAL IN THE ASSESSEES OWN CASE FOR ASSESSMENT YEARS 2007 - 08, 2008 - 09 (2013) 35 TAXMANN.COM 342 (MUMBAI TRIB) AND FOR A.Y. 2010 - 11 IN ITA NOS. 7498/MUM/2013 & 524/MUM/2014 DATED 31.07.2015. IN THE ORDER FOR A.Y. 2010 - 11, THE CO ORDINATE BENCH, AFTER CONSIDERATION THE DECISION IN THE CASE OF CHINA SHIPPING CONTAINER 6 ITA NO. 2420 MUM/2017 ASSESSMENT YEAR: 2013 - 14 LINES (HONG KONG) CO. LTD. (SUPRA), HELD AS UNDER AT PARAS 3 TO 5 THEREOF: - 3. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE TRIBUNAL ORDER IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEARS 2007 - 08 AND 2008 - 09 IN ITA NO. 7809/MUM/2010 AND 7365/MUM/2012. ON THE OTHER HAND, LD. DR SUBMITTED THAT THOUGH THIS ISSUE IS COVERED INFAVOUR OF THE ASSESSEE B Y THE TRIBUNAL IN ASSESSEES OWN CASE, HOWEVER, THERE AE VARIOUS CONTRARY DECISION, WHICH FACT HAS BEEN NOTED BY THE DRP, ITSELF IN THE IMPUGNED ORDER. THEY HAVE FOLLOWED TRIBUNAL DECISION OF CHINA SHIPPING CONTAINER LINES (HONGKONG CO. LTD.) REPORTED IN 1 45 ITD 230, TO DECIDE THIS ISSUE AGAINST THE ASSESSEE. 4. AFTER CONSIDERING THE RIVAL CONTENTIONS AND ON PERUSAL OF THE IMPUGNED ORDERS, WE FIND THAT THE MAIN ISSUE WHICH HAS BEEN CHALLENGED IS, WHETHER THE SERVICE TAX IS TO BE TREATED AS PART OF THE TO TAL RECEIPTS FOR THE PURPOSE OF COMPUTING THE PRESUMPTIVE INCOME U/S 44B. THE ASSESSEES CASE HAD BEEN THAT SERVICE TAX COLLECTED DOES NOT FORM TOTAL OF THE PART RECEIPTS AS IT DOES NOT INVOLVE ANY ELEMENT OF PROFIT, BECAUSE IT HAS BEEN COLLECTED FROM TH E CUSTOMERS ON BEHALF OF THE GOVERNMENT AND CANNOT BE INCLUDED IN THE TOTAL RECEIPTS. WE FIND THAT THE TRIBUNAL IN ASSESSEES OWN CASE HAS TAKEN A NOTE OF VARIOUS DECISIONS FOR AN D AGAINST THE ASSESSEE AND HAS REAC HED TO THE FOLLOWING CONCLUSION: - 6 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. WE HAVE ALSO CAREFULLY GONE THROUGH THE VARIOUS JUDICIAL PRONOUNCEMENT RELIED UPON BY THE LD. REPRESENTATIVES OF BOTH THE SIDES IN SUPPORT OF THEIR RESPECTIVE STANDS ON THE ISSUE. IT IS OBSERVED THAT THE ASSESSING OFFICE IN HIS IMPUGNED ORDERS AND LD. DR AT THE TIME OF HEARING BEFORE US HAVE HEAVILY RELIED ON THE DECISION OF HON'BLE UTTARAKHAND HIGH COURT IN THE CASES OF HALLIBURTON OFFSHORE SERVICES INC. (SUPRA), SEDCO FOREX 7 ITA NO. 2420 MUM/2017 ASSESSMENT YEAR: 2013 - 14 INTERNATIONAL INC. (SUPRA) AND TRANS OCEAN OFFSHORE INC. (SUPRA) IN SUPPORT OF THE REVENUE'S THAT THE AMOUNT OF SERVICE TAX COLLECTED BY THE ASSESSEE SHOULD BE INCLUDED IN THE GROSS RECEIPTS FOR THE PURPOSE OF COMPUTING THE TOTAL INCOME AS PER THE PR OVISIONS OF SECTION 44B. IT IS OBSERVED THAT RELIANCE ON THE SAID DECISIONS WAS PLACED BY THE REVENUE IN THE CASE OF DIT VS. SCHIUMBERGER ASIA SERVICE LTD. (SUPRA) WHERE THE ISSUE INVOLVED WAS WHETHER THE REIMBURSEMENT OF CUSTOM DUTY PAID BY THE ASSESSEE C OULD FORM PART OF THE GROSS RECEIPTS FOR THE PURPOSE OF DETERMINING THE DEEMED PROFIT OF THE ASSESSEE UNDER SECTION 44BB AND THE HON'BLE UTTARAKHAND HIGH COURT FOUND THE SAID CASES TO BE DISTINGUISHABLE ON FACTS OBSERVING THAT IN NONE OF THESE CASES THE IS SUE OF REIMBURSEMENT OF THE CUSTOM DUTY WAS INVOLVED, THE NATURE OF WHICH WAS STATUTORY PAYMENT. THEIR LORDSHIP HELD THAT REIMBURSEMENT TOWARDS THE CUSTOM DUTY PAID BY THE ASSESSEE BEING STATUTORY IN NATURE COULD NOT FORM PART OF THE GROSS RECEIPTS FOR THE PURPOSE OF COMPUTING THE DEEMED PROFIT UNDER SECTION 44BB. 7. THE LD. DR HAS ALSO RELIED ON THE DECISION OF DELHI BENCH OF ITAT IN THE CASE OF DEPUTY DIRECTOR OF INCOME TAX VS. TECHNIP OFFSHORE CONTRACTING B.V. (SUPRA) WHEREIN IT WAS HELD THAT THE ASSES SING OFFICER WAS JUSTIFIED IN INCLUDING THE AMOUNT OF SERVICE TAX COLLECTED BY THE ASSESSEE IN CONNECTION WITH THE SERVICES OR FACILITIES OR SUPPLY SPECIFIED UNDER SECTION 44BB PROVIDED BY THE ASSESSEE IN THE TOTAL RECEIPTS FOR THE PURPOSE OF DETERMINING P RESUMPTIVE PROFIT OF 10% UNDER SECTION 44BB. IT IS OBSERVED THAT THE SAID DECISION OF DELHI BENCH OF ITAT IN THE CASE OF DEPUTY DIRECTOR OF INCOME TAX VS TECHNIP OFFSHORE CONTRACTING B.V. (SUPRA) WAS RELIED UPON BY THE RELY IN SUPPORT OF ITS CASE ON THE SI MILAR ISSUE CASE OF ISLAMIC REPUBLIC OF IRAN SHIPPING LINES (SUPRA) BEFORE MUMBAI BENCH OF ITAT AND RELYING ON THE DECISION OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE SUDARSHAN CHEMICAL INDUSTRIES 242 ITR 769 AND THAT OF HON'BLE UTTARAKHAND HIGH COURT IN THE CASE OF DT VS. SCHLUMBERGER ASIA SERVICE LTD. (SUPRA) IT WAS HELD BY THE MUMBAI BENCHES THAT THE SERVICE TAX, WHICH IS A 8 ITA NO. 2420 MUM/2017 ASSESSMENT YEAR: 2013 - 14 STATUTORY LIABILITY, WOULD NOT INVOLVE ANY ELEMENT OF PROFITS AND SINCE THE SERVICE PROVIDER HAS COLLECTED THE SAME FROM ITS CUSTO MERS ON BEHALF OF THE GOVERNMENT, IT CANNOT BE INCLUDED IN THE TOTAL RECEIPTS FOR DETERMINING THE PRESUMPTIVE INCOME OF THE ASSESSEE UNDER SECTION 44B. THE DECISION OF MUMBAI BENCH IN THE CASE OF ISLAMIC REPUBLIC OF IRAN SHIPPING LINES (SUPRA) HAS BEEN SUB SEQUENTLY FOLLOWED BY THE TRIBUNAL AT LEAST IN THREE CASES CITED BY THE LD. COUNSEL FOR THE ASSESSEE INCLUDING THE CASE OF SIDCO FOREX INTT. DRILLING INC. (SUPRA) WHEREIN DELHI ITA NO. 457/MUM/2015 M/S. ORIENT OVERSEAS CONTAINER LINE LTD. 6 BENCH OF THE IT AT HAS DECIDED A SIMILAR ISSUE IN FAVOUR OF THE ASSESSEE HOLDING THAT REIMBURSEMENT OF SERVICE TAX, BEING A STATUTORY LIABILITY, WOULD NOT INVOLVE ANY ELEMENT OF PROFIT AND THE SAME THEREFORE COULD NOT BE INCLUDED IN TOTAL RECEIPTS FOR DETERMINING PRESUMPT IVE INCOME UNDER SECTION 44BB. 8. KEEPING IN VIEW ALL THE JUDICIAL PRONOUNCEMENT DISCUSSED ABOVE, WE ARE OF THE VIEW THAT THE PREPONDERANCE OF JUDICIAL OPINION IS IN FAVOUR OF THE ASSESSEE ON THE ISSUE AND KEEPING IN VIEW THE SAME, WE DECIDE THIS ISSUE IN FAVOUR OF THE ASSESSEE HOLDING THAT THE AMOUNT OF SERVICE TAX, BEING IN THE NATURE OF STATUTORY PAYMENT WHICH DOES NOT INVOLVE ANY ELEMENT OF PROFIT, CANNOT BE INCLUDED IN THE GROSS RECEIPTS FOR THE PURPOSE OF COMPUTING THE PRESUMPTIVE INCOME OF THE ASSESS EE UNDER SECTION 44B. GROUND NO. 1 OF THE ASSESSEES APPEAL FOR AY 2007 - 08 AND GROUND NO. 2 OF THE ASSESSEES APPEAL FOR AY 2008 - 09 ARE ACCORDINGLY ALLOWED. 5. SINCE IN ASSESSEES OWN CASE IN THE EARLIER YEARS, ONE VIEW HAS BEEN TAKEN THEREFORE, CONSISTENT WITH THE SAME PRECEDENCE, WE ALSO HOLD THAT THE AMOUNT OF SERVICE TAX CANNOT BE INCLUDED IN THE GROSS RECEIPTS FOR THE PURPOSE OF COMPUTING THE PRESUMPTIVE INCOME OF THE ASSESSEE U/S 44B. ACCORDINGLY, GROUND NO. 1 RAISED BY THE ASSESSEE IS ALLOWED. 4. 4.2 WE HAVE RESPECTFULLY PERUSED THE DECISION OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF DIRECTOR OF INCOME TAX - I VS. MITCHELL DRILLING INTERNATIONAL (P) LTD. (2015) 62 TAXMANN.COM 24 (DELHI) DATED 28.09.2015. ON CONSIDERATION OF THE IDENTICAL QUESTION OF WHETHER 9 ITA NO. 2420 MUM/2017 ASSESSMENT YEAR: 2013 - 14 THE SERVICE TAX COLLECTED BY THE ASSESSEE AND PASSED ON TO THE GOVERNMENT FROM THE PERSON TO WHOM IT HAS PROVIDED THE SERVICES CAN LEGITIMATELY BE CONSIDERED TO FORM PART OF THE GROSS RECEIPTS FOR THE PURPOSES OF COMPUTATION OF THE ASSESSEES P RESUMPTIVE INCOME UNDER SECTION 44B OF THE ACT, THEIR LORDSHIPS AT PARA 15 OF THEIR ORDER HELD THAT THE SERVICE TAX COLLECTED BY THE ASSESSEE DOES NOT HAVE ANY ELEMENT OF INCOME AND THEREFORE CANNOT FORM PART OF THE GROSS RECEIPTS FOR THE PURPOSES OF COMPU TING THE PRESUMPTIVE INCOME OF THE ASSESSEE UNDER SECTION 44B OF THE ACT. AT PARA 17 OF THE ORDER IT WAS OBSERVED THAT SERVICE TAX IS NOT AN AMOUNT PAID OR PAYABLE OR RECEIVED OR DEEMED TO BE RECEIVED BY THE ASSESSEE FOR SERVICES RENDERED BY IT. THE ASSE SSEE IS ONLY COLLECTING THE SERVICE TAX FOR PASSING IT ON TO THE GOVERNMENT. THEIR LORDSHIPS AT PARA 19 OF THEIR ORDER HELD THAT FOR THE PURPOSE OF COMPUTING THE PRESUMPTIVE INCOME OF THE ASSESSEE UNDER SECTION 44BB OF THE ACT, THE SERVICE TAX COLLECTED BY THE ASSESSEE ON THE AMOUNT PAID FOR RENDERING SERVICES IS NOT TO BE INCLUDED IN THE GROSS RECEIPTS. ITA NO. 457/MUM/2015 M/S. ORIENT OVERSEAS CONTAINER LINE LTD. 7 4.4.3 RESPECTFULLY FOLLOWING THE DECISION OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF MI TCHELL DRILLING INTERNATIONAL LTD. (SUPRA) AND OF THE COORDINATE BENCH OF THIS TRIBUNAL IN THE ASSESSEES OWN CASE FOR ASSESSMENT YEARS 2007 - 08, 2008 - 09 & 2010 - 11 (SUPRA), WE HOLD THAT FOR THE PURPOSE OF COMPUTING THE PRESUMPTIVE INCOME OF THE ASSESSEE U NDER SECTION 44BB OF THE ACT, SINCE SERVICE TAX COLLECTED BY THE ASSESSEE DOES NOT HAVE ANY ELEMENT OF INCOME, IT THEREFORE CANNOT FORM PART OF THE GROSS RECEIPTS AND CONSEQUENTLY DELETE THE ADDITION MADE IN THIS REGARD BY THE AUTHORITIES BELOW. ACCORDINGL Y, GROUND 1 (1.1 & 1.2) OF THE ASSESSEES APPEAL IS ALLOWED. 8. THE COORDINATE BENCH HAS DECIDED THE IDENTICAL ISSUE IN FAVOUR OF THE ASSESSEE IN THE ASSESSEES OWN CASE FOR THE A.Y. 2011 - 12 BY FOLLOWING THE DECISION OF THE HONBLE DELHI HIGH COURT IN TH E CASE OF DIT - 1 VS. MITCHELL DRILLING INTERNATIONAL PVT. LTD. (2015) 62 TAXMANN.COM 24 (DEL) AND THE DECISIONS RENDERED BY THE COORDINATE BENCH IN THE ASSESSEES OWN CASE FOR THE A.YS. 2007 - 08, 2008 - 09 AND 2010 - 11. THE LD. DR DID NOT CONTEND THAT THE HONB LE HIGH COURT HAS STAYED THE OPERATION OF THE ORDER PASSED BY THE 10 ITA NO. 2420 MUM/2017 ASSESSMENT YEAR: 2013 - 14 COORDINATE BENCH AFORESAID. HENCE, RESPECTFULLY FOLLOWING THE DECISION OF THE COORDINATE BENCH, WE ALLOW THIS GROUND OF APPEAL OF THE ASSESSEE. 9. VIDE GROUND NO. 2 AND 3 , THE ASSESSEE HAS CHALLENGED THE ACTION OF THE LD. DCIT IN RESTRICTING THE CREDIT OF TDS TO RS. 3,68,08,427/ - AS AGAINST THE AMOUNT OF RS. 3,68,18,056/ - CLAIMED BY THE ASSESSEE IN ITS RETURN OF INCOME THEREBY RESULTING INTO A SHORT CREDIT FOR TDS OF RS. 9,629/ - AND RESTRIC TING THE CREDIT OF ADVANCE TAX AND SELF ASSESSMENT TAX TO RS. 32,66,80,448/ - AS AGAINST THE AMOUNT OF RS. 32,81,22,445/ - AS CLAIMED BY THE ASSESSEE IN ITS RETURN OF INCOME THEREBY RESULTING INTO SHORT CREDIT FOR ADVANCE TAXES OF RS.14,43,997/ - . 10. WE HA VE HEARD THE RIVAL CONTENTIONS OF THE PARTIES, THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE APPELLANT HAS FILED APPLICATION S U/S 154 OF THE ACT FOR RECTIFICATION OF THE AFORESAID MISTAKE APPARENT FROM THE RECORD BEFORE THE DCIT, THEREFORE DCIT M AY BE DIRECTED TO GRANT THE FULL CREDIT OF TDS AND ADVANCE TAXES . WE NOTICE THAT THE COORDINATE BENCH OF THE TRIBUNAL HAS DEALT WITH THE IDENTICAL ISSUE S IN THE ASSESSEES OWN CASE FOR THE A.Y. 2011 - 12 HOLDING AS UNDER: - 6.1 IN THIS GROUND, THE ASSESSEE CONTENDS THAT THE AO IN THE ORDER OF ASSESSMENT HAD GRANTED IT SHORT CREDIT OF TDS AMOUNTING TO `34,583/ - AND SHORT CREDIT FOR ADVANCE TAX AMOUNTING TO `10,95,525/ - AND THAT INSPITE OF SUBSEQUENTLY FILING A RECTIFICATION APPLICATION UNDER SECTION 154 OF T HE ACT, THE AO HAS NOT RECTIFIED THE MISTAKE. IN THIS REGARD, AFTER HEARING BOTH PARTIES, WE DIRECT THE AO TO CONSIDER, EXAMINE AND VERIFY THE ASSESSEES CLAIM OF GRANT OF SHORT CREDIT OF ADVANCE TAX OF `10,95,525/ - AND TDS OF `34,583/ - WHILE GIVING EFFECT TO THIS ORDER, AFTER AFFORDING THE ASSESSEE OF ADEQUATE OPPORTUNITY OF BEING HEARD IN THE MATTER AND TO FILE DETAILS/SUBMISSIONS REQUIRED IN THIS REGARD. CONSEQUENTLY, GROUND NO. 3 OF THE ASSESSEES APPEAL IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 11 ITA NO. 2420 MUM/2017 ASSESSMENT YEAR: 2013 - 14 11. SINCE, THE COORDINATE BENCH HAS DIRECTED THE AO TO CONSIDER, EXAMINE AND VERIFY THE ASSESSEES CLAIM OF GRANT OF SHORT CREDIT OF TDS AND ADVANCE TAX ES, WE RESPECTFULLY FOLLOWING THE DECISION OF THE COORDINATE BENCH DIRECT THE AO TO EXAMINE AND VERIFY THE CLAIM OF GRANT OF SHORT CREDIT OF TDS AND ADVANCE TAX OF RS. 9,629/ - AND RS. 14,43,997/ - RESPECTIVELY. 12. GROUND NO. 4 PERTAINS TO LEVY OF INTEREST OF RS. 23,361/ - U/S 234C OF THE ACT. SINCE, THE CHARGING OF INTEREST IS CONSEQUENTIAL AND MANDATORY THE AO HAS NO DISCRETION IN THE MATTER. HOWEVER, WE DIRECT THE AO TO RE - COMPUTE THE INTEREST CHARGEABLE U/S 234C OF THE ACT IF ANY, WHILE GIVING EFFECT TO THIS ORDER. 13. THE LAST GROUND IS AGAINST INITIATION OF PENALTY PROCEEDINGS U /S 271 (1) (C). SINC E, THIS GROUND IS PREMATURE AS NO PENALTY U/S 271 (1) (C) HAS BEEN LEVIED ON THE ASSESSEE, NO CAUSE OF GRIEVANCE ARISES TO ADJUDICATE THE SAME AT THIS STAGE. HENCE, WE DISMISS THIS GROUND OF APPEAL OF THE ASSESSEE. IN THE RESULT, APPEAL FILED BY THE AS SESSEE FOR ASSESSMENT YEAR 2013 - 2014 IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH NOVEMBER , 2018. SD/ - SD/ - ( B.R. BASKARAN ) ( RAM LAL NEGI ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; DATED: 20 / 11 / 201 8 ALINDRA, PS 12 ITA NO. 2420 MUM/2017 ASSESSMENT YEAR: 2013 - 14 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI