Transocean Offshore International Ventures Ltd., New Delhi V. DDIT, Dehradun

ITA 2915/DEL/2010

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 7390 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-08-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 11-08-2010
• Assessment Year: 2006-2007
• Appeal Filed On: 10-06-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: Y K KAKKAR
• Section: 44BB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G: NEW DELHI BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI R.C. SHARMA, ACCOUNTANT MEMBER ITA NO. 2915/DEL/2010 ASSESSMENT YEAR: 2006-07 TRANSOCEAN OFFSHORE INTERNATIONAL VENTURES LTD., C/O NANGIA & CO., SUITE 4A, PLAZA M-6, JASOLA, NEW DELHI. AABCT7361B VS. DDIT, INTL. TAXATION, DEHRADUN. (APPELLANT) (RESPONDENT) APPELLANT BY : NEERAJ SHARMA, CA RESPONDENT BY: Y.K. KAKKAR, SR. DR O R D E R PER I.P. BANSAL, J.M. THIS IS AN APPEAL FILED BY THE ASSESSEE. IT IS D IRECTED AGAINST THE ORDER OF CIT(A) DATED 16.2.10 FOR A.Y. 2006-07. GROUNDS OF APPEAL READ AS UNDER: - 1. THE LD. CIT(A), DEHRADUN (HEREINAFTER REFERRED TO AS CIT(A)) HAS ERRED IN UPHOLDING THE ORDER OF THE AO THAT REIMBURSEMENT REVENUES OF RS. 19,901,833/- ON ACCOUNT OF EXPENDITURE INCURRED ON BEHALF OF CUSTOMERS, IS INCLUDIBLE IN THE AGGREGATE AMOUNT REFERRED TO I N SUB-SECTION (2) OF SEC. 44BB OF THE I.T. ACT, 1961. 2. THE LD. CIT(A) HAS ERRED IN LAW IN UPHOLDING THE OR DER OF THE AO THAT THE ENTIRE REVENUE OF RS. 26,178,000/- ON ACCOUNT OF DE MOBILIZATION OF THE RIG TRIDENT VI WERE INCLUDIBLE IN THE AGGREGATE A MOUNT REFERRED TO IN SUB-SECTION (2) OF SEC. 44BB OF THE I.T. ACT, 1961. THE CIT(A) HAS NOT APPRECIATED THAT THE DEMOBILIZATION CHARGES ATTRIBU TABLE TO THE VOYAGE OUTSIDE THE INDIAN TERRITORIAL WATERS OF INDIA WOUL D NOT BE INCLUDED WHILE CALCULATING THE AGGREGATE AMOUNT REFERRED TO IN SUB -SECTION (2) OF SEC. 44BB OF THE ACT. 2 ITA NO. 2915/DEL/2010 YOUR APPELLANT PRAYS THAT THE ERRONEOUS ORDER BE CA NCELLED AND APPROPRIATE RELIEF MAY BE GRANTED TO THE APPELLANT. YOUR APPELLANT CRAVES LEAVE TO ADD TO, ALTER, AMEND , VARY, OMIT, SUBSTITUTE OR DELETE ANY OF THE AFOREMENTIONED GROUNDS OF APPEAL OR ADD A NEW GROUND OR GROUNDS OF APPEAL AT ANY TIME BEFORE OR AT THE TIME OF HEARING OF THE APPEAL. 2. THE ISSUE RAISED IN GROUND NO. 1 HAS BEEN DECIDE D BY LD. CIT(A) AGAINST THE ASSESSEE. FOLLOWING THE DECISION OF JURISDICTI ONAL HIGH COURT IN THE CASE OF CIT VS. HALLIBURTON OFFSHORE SERVICES INC. REPORTED IN 300 ITR 265, WHEREIN IT HAS BEEN HELD THAT REIMBURSEMENT OF THE EXPENDITURE IS INCLUDIBLE IN THE REVENUE AS CONTEMPLATED BY SEC. 44BB OF THE I.T. AC T, 1961 (ACT). LD. COUNSEL APPEARING BEFORE CIT(A) HAD SUBMITTED THAT THE DECI SION OF HONBLE HIGH COURT WAS FURTHER CHALLENGED IN SUPREME COURT AND, THEREF ORE, THE ISSUE IS UNDER LITIGATION. LD. CIT(A) OBSERVED THAT AT THE MOMENT THE MATTER IS COVERED BY THE AFOREMENTIONED DECISION OF JURISDICTIONAL HIGH COUR T AND RESPECTFULLY FOLLOWING THE SAID JUDGMENT HE HAS HELD THAT REIMBURSEMENT RE CEIPTS IN THE HANDS OF THE ASSESSEE HAVE RIGHTLY BEEN BROUGHT TO TAX U/S 44BB OF THE ACT AND IN THIS MANNER HE HAS UPHELD THE DISALLOWANCE MADE BY THE A O THE ASSESSEE IS AGGRIEVED, HENCE IN APPEAL. 3. AT THE OUTSET IT WAS SUBMITTED BY LD. COUNSEL AP PEARING ON BEHALF OF ASSESSEE THAT THE ISSUE IS PRESENTLY COVERED BY THE AFOREMENTIONED DECISION OF HONBLE UTTRAKHUND HIGH COURT VIDE WHICH THE ISSUE HAS BEEN DECIDED AGAINST THE ASSESSEE. 3 ITA NO. 2915/DEL/2010 4. ON THE OTHER HAND, LD. DR, INTER-ALIA, RELIED UP ON THE AFOREMENTIONED DECISION OF HONBLE JURISDICTIONAL HIGH COURT. 5. IN THIS VIEW OF THE SITUATION, AFTER HEARING BOT H THE PARTIES, AS LD. CIT(A) HAS DECIDED THIS ISSUE IN FAVOUR OF DEPARTMENT FOLL OWING THE DECISION OF JURISDICTIONAL HIGH COURT WHICH IS BINDING OF ALL T HE AUTHORITIES WORKING UNDER THE JURISDICTIONAL OF HONBLE HIGH COURT, WE FIND N O INFIRMITY AND GROUND NO. 1 OF THE ASSESSEES APPEAL IS DISMISSED. 6. SO AS IT RELATES TO GROUND NO. 2; LD. CIT(A) HAS DECIDED THIS GROUND AGAINST THE ASSESSEE FOLLOWING THE JURISDICTIONAL H IGH COURT DECISION IN THE CASE OF SEDCO FOREX INTERNATIONAL DRILLING INC. 299 ITR 238, WHEREIN IT HAS BEEN HELD THAT THE ENTIRE MOBILIZATION REVENUE IS CHARGEABLE TO TAX U/S 44BB OF THE ACT AND THE SIMILAR SUBMISSIONS WERE MADE BY THE LD. CO UNSEL BEFORE CIT(A) AS WERE MADE IN REGARD TO FIRST GROUND. HOWEVER, FOLL OWING THE AFOREMENTIONED DECISION OF JURISDICTIONAL HIGH COURT IN THE CASE O F SEDCO FOREX (SUPRA). LD. CIT(A) HAS DECIDED THIS GROUND AGAINST THE ASSESSEE . 7. DURING THE COURSE OF HEARING, IT WAS FAIRLY CONC EDED BY LD. COUNSEL THAT FOR THE TIME BEING THIS ISSUE IS ALSO COVERED BY TH E ASSESSEE BY THE DECISION OF HONBLE HIGH COURT IN THE CASE OF SEDCO FOREX (SUPR A). 8. LD. DR ON THE OTHER HAND SUBMITTED THAT NOT ONLY THE SECOND GROUND IS COVERED AGAINST THE ASSESSEE BY THE AFOREMENTIONED DECISION OF HONBLE HIGH COURT IN THE CASE OF SEDCO FOREX (SUPRA). 4 ITA NO. 2915/DEL/2010 9. IN THIS VIEW OF THE SITUATION, AFTER HEARING BOT H THE PARTIES, WE DISMISS THE GROUND NO. 2 OF THE ASSESSEES APPEAL AS LD. CIT(A) WAS RIGHT IN REJECTING THE CLAIM OF THE ASSESSEE ON THE BASIS OF THE AFOREMENT IONED DECISION OF JURISDICTIONAL HIGH COURT IN THE CASE OF SEDCO FORE X (SUPRA). THEREFORE, GROUND NO. 2 IS DISMISSED. 10. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 20.8.2010 (R.C. SHARMA) ACCOUNTANT MEMBER (I.P. BANSAL) JUDICIAL MEMBER DATED: 20.8.2010 *KAVITA COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, NEW DELHI. TRUE COPY BY ORDER DEPUTY REGISTRAR