DCIT (International Taxation), Dehradun V. M/s. Smith International Inc., Dehradun

ITA 4077/DEL/2016

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 5344 (ITAT-DEHRADUN)
• Duration Of Justice: 4 year(s) 10 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-05-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2012-2013
• Appeal Filed On: 18-07-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: THAKUR SINGH MAPWAL
• Assessee Lawyers: SANJAY SHUKLA
• Keywords: Permanent establishment; Tax effect
• Section: 201; 44BB; 13

Judgement Text

PAGE | 1 IN THE INCOME TAX APPELLATE TRIBUNAL [ DEHRADUN CIRCUIT BENCH: DEHRADUN ] BEFORE SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER A N D SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO. 4077 /DEL/201 6 (ASSESSMENT YEAR: 201 2 - 1 3 ) DCIT, CIRCLE : 2, INTERNATIONAL TAXATION, DEHRADUN. VS. M/S. SMITH INTERNATIONAL INC. C/O. NANGIA & CO., 3 RD FLOOR, NCR PLAZA, CANTT. ROAD, DEHRADUN. PAN: AA HCS3148R (APPELLANT ) (RESPONDENT) DEPARTMENT BY: SHRI THAKUR SINGH MAPWAL, JCIT - DR; ASSESSEE BY : SHRI SANJAY SHUKLA, C.A.; DATE OF HEARING 5 /03/2021 DATE OF PRONOUNCEMENT 1 5 / 0 5 / 2021 O R D E R PER PRASHANT MAHARISHI, A. M. 1. THIS APPEAL IS FILED BY THE DY. COMMISSIONER OF INCOME TAX (INTERNATIONAL TAXATION ) CIRCLE - 2, DEHRADUN , FOR ASSESSMENT YEAR 2012 - 13 , RAISING SEVERAL GROUNDS OF APPEAL. 2. THE TOTAL INCOME DECLARED BY THE ASSESSEE IN THE RETURN OF INCOME IS RS.7 , 8 7 , 0 1 ,9 9 1 / - AND TOTAL INCOME COMPUTED BY THE ASSESSING OFFICER IS RS.8,54,75,129/ - . THE TAX COMPUTED ON INCOME OF THE ASSESSEE IS @ 42%. ON APPEAL BEFORE THE LD. CIT (APPEALS) THE APPEAL OF THE ASSESSEE WAS PARTLY ALLOWED. THUS, CONSIDERING THE FACT THAT ASSESSEE IN ITS RETURN OF INCOME HAS ADMITTED THAT THERE IS A PERMANENT ESTABLISHMENT IN INDIA THE TAX INVOLVED I N THE ABOVE APPEAL IS NOT ABOVE THE PRESCRIBED TAX EFFECT FOR FILING APPEAL BEFORE THE TRIBUNAL BY THE REVENUE. THUS, AS SUCH, THE APPEAL OF THE LD. ASSESSING OFFICER IS SUBJECT TO DISMISSAL AS LOW TAX EFFECT APPEAL. PAGE | 2 ANYWAY, THE ONLY ISSUE INVOLVED IN TH IS APPEAL IS THAT WHETHER THE RECEIPT ON ACCOUNT OF SERVICE TAX IS INCLUDIBLE IN GROSS REVENUE FOR THE PURPOSE OF SECTION 44BB OF THE INCOME TAX ACT, 1961 (THE ACT). 3. THE LD. AR, AT THE TIME OF HEARING, SUBMITTED THAT THE APPEAL OF THE REVENUE IS LIABLE TO BE DISMISSED ON ACCOUNT OF LOW TAX APPEAL. 4. THE LD. DR LOOKING AT THE FIGURE OF THE RETURNED INCOME AND THE ASSESSED INCOME AGREED WITH THE SAME. 5. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES. ON THE MERITS, WE FIND THAT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF FULL BENCH OF HONBLE UTTARAKHAND HIGH COURT IN DIRECTOR OF INCOME TAX (INTERNATIONAL TAXATION) VS. SCHLUMBER GER ASIA SERVICES LTD. 414 ITR 1 WHEREIN IT HA S BEEN HELD THAT AMOUNT REIMBURSED TO THE ASSESSEE REPRESENT SERVICE TAX PAID IS NOT AN AMOUNT PAID TO ASSESSEE ON ACCOUNT OF PROVISION OF SERVICES IN CONNECTION WITH EXPLORATION AND PRODUCTION OF MINERAL OIL. THEREFORE, IT WOULD NOT FORM PART OF AGGREGAT E AMOUNT REFERRED IN SECTION 44BB(2) OF THE ACT. EVEN OTHERWISE THE APPEAL OF THE LD. ASSESSING OFFICER AS TAX EFFECT OF LESS THAN RS.50 LAKHS AND, THEREFORE, IT DESERVES TO BE DISMISSED. 6. ACCORDINGLY, THE APPEAL FILED BY THE LD. ASSESSING OFFICER IS DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 1 8 . 0 5 .2021. - SD / - - S D / - (SUDHANSHU SRIVASTAVA) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 1 8 . 0 5 .2021 *MEHTA* COPY FORWARDED TO : - 1. APP ELLANT 2. RESPONDENT 3. CIT 4. CIT (A PPEALS ) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI [DEHRADUN CIRCUIT BENCH, DEHRADUN]