THE ADIT(IT)-2(1), MUMBAI V. M/S. VALENTINE MARITIME (GULF) LLC (VMGL), MUMBAI

ITA 700/MUM/2009

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 71888 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 9 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-11-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: L
• Next Hearing Date: 07-03-2013
• Assessment Year: misc
• Appeal Filed On: 03-02-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AJAY SRI VASTAVA
• Keywords: Double taxation relief; Deemed to accrue or arise in india
• Section: 234B; 28

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL L B ENCH, MUMBAI . . , , !'#$ , % & BEFORE SHRI B.R. MITTAL, JM AND SHRI N.K. BILLAI YA, AM ./ I.T.A. NO.700/MUM/2009 ( ' ' ' ' / ASSESSMENT YEAR :2005-06 THE ADIT (IT)-2(1), SCINDIA HOUSE, BALLARD ESTATE, MUMBAI-400 038 M/S. VALENTINE MARITIME (GULF)LLC (VMGL), C/O VINOD AGNANI, 402-A, CHHAYA, LOKHANDWALA COMPLEX, ANDHERI (W), MUMBAI ( % ./ )* ./PAN/GIR NO. :AABCV 1070B ( (+ /APPELLANT ) .. ( ,-(+ / RESPONDENT ) ./ I.T.A. NO.701/MUM/2009 ( ' ' ' ' / ASSESSMENT YEAR :2005-06 THE ADIT (IT)-2(1), SCINDIA HOUSE, BALLARD ESTATE, MUMBAI-400 038 M/S. VALENTINE MARITIME LTD., 2004-05, MONTREAL, B-31, SHASTRI NAGAR, ANDHERI (W), MUMBAI-400 053 ( % ./ )* ./PAN/GIR NO. : AABCV 8604R ( (+ /APPELLANT ) .. ( ,-(+ / RESPONDENT ) (+ . / DEPARTMENT BY : ` SHRI AJAY SRIVASTAVA ,-(+ / . /ASSESSEE BY : SHRI HIRO RAI / 01% / DATE OF HEARING : 26.11.2013 23' / 01% / DATE OF PRONOUNCEMENT : 27.11.2013 4 / O R D E R ITA NOS. 700 & 701/M/09 2 PER N.K. BILLAIYA, AM: THESE TWO APPEALS FILED BY THE REVENUE PERTAINING TO TWO DIFFERENT ASSESSEES ARE DIRECTED AGAINST THE TWO SEPARATE OR DERS OF THE LD. CIT(A)- XXXI,MUMBAI PERTAINING TO A.Y. 2005-06. AS COMMON I SSUES ARE INVOLVED IN BOTH THESE APPEALS, THEY WERE HEARD TOG ETHER AND DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE AN D BREVITY. ITA NO. 700/MUM/2009 2. THE REVENUE HAS RAISED 3 SUBSTANTIVE GROUNDS OF APPEAL WHICH READ AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE ID. CIT (A) ERRED IN DIRECTING THE ASSESSI NG OFFICER TO ASSESS THE TOTAL RECEIPTS OF RS. 16,22,01,626/- UNDER SECTION 44BB OF THE IT ACT, 1961 HOLDING THAT (I) WHERE THE CONSIDERATION FOR COMPOSITE CONTRACT CONTAINING VARIOUS TERMS OF WORK AT VARIOUS STAGES OF COMPLETION CANNOT BE APPORTIONED IN PART AND THEREFORE, THE TOTAL CONSIDERATION OF SUCH INDIVISIBLE CONTRACT HAS TO BE HELD AS INCOME WITHIN THE MEANING OF SECTION 44BB OF THE ACT. (II) THE CONSIDERATION PAID FOR A PROJECT INVOLVING INSTALLATION, ASSEMBLY OR THE LIKE WOULD BE THE PRICE PAID FOR SUCH PROJECT AND CANNOT BE TERMED AS FEES FOR TECHNICAL SERVICES (III) THE SUB-CONTRACT AGREEMENT IS BEING UNDER CONSIDERATION IS A COMPOSITE ONE AND THE INCOME OF THE ASSESSEE IS TAXABLE UNDER SECTION 44BB OF THE ACT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE ID. CIT(A) ERRED IN DIRECTING THE ASSESSING OFF ICER THE RECEIPTS OF RS. 11, 19,02,560/- TREATED AS FEES FOR TECHNIC AL SERVICES BE INCLUDED AS PART OF TOTAL CONSIDERATION OF SUB-CONT RACT RECEIPT AND TO BE ASSESSED AS PER THE PROVISIONS OF SECTION 44B B OF THE ACT ITA NOS. 700 & 701/M/09 3 AND ALSO THE OTHER RECEIPTS OF RS. 3,24,40,325/- BE ING 20% OF RS. 16,22,01,626/- TO BE CONSIDERED AS PART OF TOTAL CO NSIDERATION. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE ID. CIT(A) ERRED IN HOLDING THAT SINCE THE ENTI RE INCOME OF THE ASSESSEE WAS LIABLE FOR DEDUCTION OF TAX AT SOURCE UNDER SECTION 195 OF THE ACT, NO ADVANCE-TAX WAS PAYABLE AND CONS EQUENTLY, INTEREST UNDER SECTION234B COULD NOT BE CHANGED. 3. THE ASSESSEE IS A NON-RESIDENT COMPANY ENGAGED I N THE BUSINESS OF PROVIDING TECHNICAL/ENGINEERING SERVICES. DURING T HE YEAR UNDER CONSIDERATION, THE ASSESSEE EXECUTED THE CONTRACT W ITH ENGINEERS INDIA LTD. FOR LAYING/INSTALLATION OF LINE PIPES FOR THRE E PIPELINE PROJECTS IN MUMBAI HIGH NORTH FIELD. IN THE RETURN OF INCOME, THE ASSESSEE CLAIMED TO BE A FOREIGN COMPANY INCORPORATED IN ABU DHABI, (UAE). THE ASSESSEE ALSO CLAIMED TO BE GOVERNED BY THE PROVISI ONS OF DOUBLE TAXATION AVOIDANCE AGREEMENT (DTAA) BETWEEN INDIA A ND UAE. THE AO CAREFULLY CONSIDERED THE DTAA AND CAME TO THE CO NCLUSION THAT THE ASSESSEE IS NOT ELIGIBLE TO CLAIM THE BENEFITS OF T HE AGREEMENT FOR AVOIDANCE OF DOUBLE TAXATION EXECUTED BETWEEN INDI A AND UAE. THEREFORE, THE ASSESSEE WOULD BE GOVERNED BY DOMEST IC INDIAN TAXATION LAW I.E. INCOME TAX ACT 1961. 3.1. DURING THE COURSE OF THE ASSESSMENT PROCEEDING S, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS RECEIVED PAYM ENTS AMOUNTING TO US$ 62,54,591/- I.E. RS. 27,41,04,186/-. THESE PA YMENTS WERE RECEIVED UNDER VARIOUS HEADS SUCH AS MATERIAL, MOBILIZATION, INSTALLATION ETC. THE AO CONSIDERED THESE PAYMENTS RECEIVED BY THE ASSESS EE IN THE LIGHT OF THE AGREEMENT OF THE ASSESSEE WITH ENGINEERS INDIA LTD. , AS ALSO TO THE ORIGINAL BIDDING DOCUMENTS OF ONGC. THE AO ALSO OB SERVED THAT THE ASSESSEE HAS CLAIMED THAT ITS INCOME IS TAXABLE U/S . 44BB OF THE ACT. HOWEVER, THE AO WAS OF THE OPINION THAT CONSIDERING THE VARIOUS CLAUSES ITA NOS. 700 & 701/M/09 4 OF THE AGREEMENT RELATING TO THE SCOPE OF SERVICES RENDERED BY THE ASSESSEE, THE ASSESSEE IS ALSO PROVIDING TECHNICAL SERVICES. THE AO FURTHER OBSERVED THAT THE CLAIM OF DEDUCTION FOR MO BILIZATION, DEMOBILIZATION EXPENSES BY THE ASSESSEE IS NOT TENA BLE IN LAW AS PER THE RECENT DECISION OF THE HONBLE UTTARKHAND HIGH COUR T IN THE CASE OF SEDCO FOREX INTERNATIONAL INC VS CIT IN ITA NO. 99 OF 1999 NEW NO. 434 OF 2001. THE AO WENT ON TO COMPUTE THE INCOME BY BIFURCATING THE TOTAL PAYMENTS RECEIVED BY THE ASSESSEE UNDER TWO HEADS (A) DEEMED INCOME U/S. 44BB AT THE RATE OF 10% OF RS. 12,97,61 ,300/- COMPUTED THE TAXABLE INCOME UNDER THIS HEAD AS RS. 12,97,61,30/- AND (B) FEES FOR TECHNICAL SERVICES RS. 14,43,42,885/-. 4. THE ASSESSEE STRONGLY AGITATED THIS ACTION OF TH E AO BEFORE THE LD. CIT(A). IT WAS STRONGLY CONTENDED BEFORE THE LD. C IT(A) THAT THE ASSESSEE COMPANY, RESIDENT OF UAE WAS ENTITLED TO B E GOVERNED BY THE PROVISIONS OF DTAA AND REVENUE EARNED WERE OFFERED FOR TAX UNDER ARTICLE-5 OF THE DTAA. UNDER ARTICLE-7 OF THE DTAA , THE BUSINESS PROFITS OF THE ASSESSEE COULD BE TAXED IN INDIA ONL Y IF IT HAS A PE IN INDIA WITHIN THE MEANING OF ARTICLE-5 OF THE DTAA. IT WA S ARGUED BEFORE THE LD. CIT(A) THAT THE AGREEMENT HAS NOT BEEN INTERPRE TED BY THE AO PROPERLY. THE AGREEMENT SHOULD HAVE BEEN READ AS A WHOLE. IT WAS POINTED OUT THAT THE AO HAS CHERRY PICK CERTAIN CLA USES OF THE CONTRACT AND IGNORED THE OTHER RELEVANT CLAUSES THEREBY WRONGLY INTERPRETING, UNDERSTANDING AND APPRECIATING THE TRUE NATURE OF T HE CONTRACT. IT WAS POINTED OUT THAT THE MAIN INTENTION/PURPOSE OF THE ASSOCIATION BETWEEN THE ASSESSEE AND ENGINEERS INDIA LTD WAS TO INSTALL OFF SHORE PIPELINES, RISERS AND RISERS CLAMPS, TESTING ETC. TO ACHIEVE THIS MA IN PURPOSE, THE ASSESSEE HAD UNDERTAKEN VARIOUS ACTIVITIES WHICH ARE LISTED DOWN IN THE VARIOUS ARTICLES OF THE CONTRACT. IT WAS STRONGLY CONTENDE D THAT THESE ACTIVITIES ITA NOS. 700 & 701/M/09 5 WERE INCIDENTAL TO THE MAIN JOB AND WERE INTEGRAL P ART OF THE CONTRACT TO ENSURE THAT ALL THE PIPE LINES ARE SUCCESSFULLY INS TALLED, COMMISSIONED, TESTED AND COMPLY WITH THE STANDARDS SET OUT IN THE CONTRACT. THE ASSESSEE RELIED UPON VARIOUS JUDICIAL DECISIONS WHICH HAVE B EEN INCORPORATED BY THE LD. CIT(A) IN HIS ORDER. THE MAIN CONTENTION O F THE ASSESSEE IS THAT THERE WAS NO SEPARATE INDEPENDENT SERVICES PROVIDED BY THE ASSESSEE. THE CONSIDERATION UNDER THE CONTRACT WAS A LUMPSUM AMO UNT AND NO SEPARATE AMOUNT HAS BEEN IDENTIFIED FOR TECHNICAL SERVICES. 4.1. AFTER CONSIDERING THE FACTS AND THE SUBMISSION S, THE LD. CIT(A) OBSERVED THAT THE AO HAS CONSIDERED PART OF THE INC OME OF THE ASSESSEE AS FTS. THE LD. CIT(A) FURTHER OBSERVED THAT THE ASSE SSEE HAS ENTERED IN THE SUB-CONTRACT AGREEMENT WITH ENGINEERS INDIA LTD ., AS A TURN KEY CONTRACT WITH LUMPSUM CONSIDERATION. IT WAS A COMP OSITE CONTRACT IN WHICH TERMS , CONSIDERATION FOR WORK AND PART OF CO NTRACT ARE INDIVISIBLE. THE LD. CIT(A) WAS CONVINCED THAT THE DECISION OF T HE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS MITSUI ENGG. & SHI P BUILDING CO. LTD. 259 ITR 248 SQUARELY APPLY ON THE FACTS OF THE ASSE SSEES CASE. THE LD. CIT(A) WAS ALSO CONVINCED THAT THE CONSIDERATION RE CEIVED IN LIEU OF THE EXECUTION OF TURNKEY PROJECT WOULD FALL UNDER THE P ROVISIONS OF SEC. 44BB OF THE ACT. THE LD. CIT(A) DISCUSSED CERTAIN JUDIC IAL DECISIONS AND CAME TO THE CONCLUSION THAT THE RECEIPT OF RS. 11,19,02, 560/- TREATED AS FTS BY THE AO SHOULD BE INCLUDED AS PART OF TOTAL CONSIDE RATION OF SUB-CONTRACT RECEIPT AND DESERVES TO BE ASSESSED AS PER PROVISIO NS OF SEC. 44BB OF THE ACT AND THE BALANCE RECEIPT IS ALSO TO BE ASSESSED U/S. 44BB OF THE ACT. 5. AGGRIEVED BY THIS, REVENUE IS BEFORE US. 6. THE LD. DEPARTMENTAL REPRESENTATIVE STRONGLY SUP PORTED THE FINDINGS OF THE AO. THE LD. DR DREW OUR ATTENTION TO THE SCOPE OF WORK ITA NOS. 700 & 701/M/09 6 AS PROVIDED IN THE SUB-CONTRACT WORK BETWEEN ENGINE ERS INDIA LTD AND THE ASSESSEE. IT IS THE SAY OF THE LD. DR THAT WORK AS PROVIDED UNDER CLAUSE (I) A,B,C,D,E ONWARDS IS NOTHING BUT PROVIDING OF T ECHNICAL SERVICES AND THEREFORE THE AO HAS RIGHTLY TREATED PART OF THE P AYMENT AS FEE FOR TECHNICAL SERVICES. IT IS THE SAY OF THE LD. DR TH AT PROVISIONS OF SEC. 9(1)(VII) WOULD PREVAIL OVER SECTION 44BB OF THE AC T. 7. PER CONTRA, THE LD. COUNSEL FOR THE ASSESSEE STR ONGLY SUPPORTED THE FINDINGS OF THE LD. CIT(A) AND FILED A PAPER BOOK O F DECISIONS RELIED UPON BY HIM WHICH CONTAINS DECISIONS OF THE CO-ORDI NATE BENCHES OF THE TRIBUNAL AS EXHIBITED FROM PAGE-1 TO 37 OF THE PAPE R BOOK. POINTING OUT TO THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF JINDAL DRILLING AND INDUSTRIES LTD. 320 ITR 104, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT IN THIS CASE, THE HONBLE D ELHI HIGH COURT ON IDENTICAL FACTS HAS HELD THAT PROVISION OF PRESUMP TIVE TAX WOULD APPLY AND NOT SECTION 9(1)(VII). SIMILAR DECISION HAVE B EEN TAKEN BY THE TRIBUNAL DELHI BENCH IN THE CASE OF G&T RESOURCES (EUROPE) LTD. VS DCIT 139 TTJ 568. 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND CAR EFULLY PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIA L EVIDENCES BROUGHT ON RECORD. THE ENTIRE DISPUTE REVOLVES AROUND WHETHER PART OF THE PAYMENT RECEIVED BY THE ASSESSEE CAN BE CONSIDERED AS FEE F OR TECHNICAL SERVICES AND WHETHER THE OTHER PART WOULD BE ASSESSED UNDER THE PRESUMPTIVE TAX OF SEC. 44BB OF THE ACT. IT IS NOT IN DISPUTE THAT BY SUB-CONTRACT AGREEMENT BETWEEN ENGINEERS INDIA LTD AND THE ASSES SEE, THE ASSESSEE WAS GIVEN A TURNKEY PROJECT FOR LAYING AND INSTALLA TION OF PIPE LINES. IT IS A SETTLED PROPOSITION OF LAW THAT WHEN A CONTRACT C ONSISTS OF A NUMBER OF TERMS AND CONDITIONS EACH CONDITION DOES NOT FORM S EPARATE CONTRACT. THE ITA NOS. 700 & 701/M/09 7 CONTRACT HAS TO BE READ AS A WHOLE AS LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF CHATURBUJ VALLABHDAS AIR 1954 (SC) 236. 9.1. A CAREFUL PERUSAL OF THE VARIOUS CLAUSES OF TH E CONTRACT IN THE LIGHT OF THE PROVISIONS OF SEC. 44BB WHICH READS AS UNDER : 44BB. (1) NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTA INED IN SECTIONS 28 TO 41 AND SECTIONS 43 AND 43A , IN THE CASE OF AN ASSESSEE 83 [, BEING A NON-RESIDENT,] ENGAGED IN THE BUSINESS O F PROVIDING SERVICES OR FACILITIES IN CONNECTION WITH , OR SUPPLYING PLANT AND MACHINERY ON HIRE USED, OR TO BE USED, IN THE PROSP ECTING FOR, OR EXTRACTION OR PRODUCTION OF, MINERAL OILS, A SUM EQ UAL TO TEN PER CENT OF THE AGGREGATE OF THE AMOUNTS SPECIFIED IN SUB-SECTI ON (2) SHALL BE DEEMED TO BE THE PROFITS AND GAINS OF SUCH BUSINESS CHARGEABLE TO TAX UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OR PR OFESSION : PROVIDED THAT THIS SUB-SECTION SHALL NOT APPLY IN A CASE WH ERE THE PROVISIONS OF SECTION 42 OR SECTION 44D OR SECTION 115A OR SECTION 293A APPLY FOR THE PURPOSES OF COMPUTING PROFITS OR GAI NS OR ANY OTHER INCOME REFERRED TO IN THOSE SECTIONS. (2) THE AMOUNTS REFERRED TO IN SUB-SECTION (1) SHAL L BE THE FOLLOWING, NAMELY : (A) THE AMOUNT PAID OR PAYABLE (WHETHER IN OR OUT OF INDIA) TO THE ASSESSEE OR TO ANY PERSON ON HIS BEHALF ON ACCOUNT OF THE PROVISION OF SERVICES AND FACILITIES IN CONNECTION WITH, OR SUPPLY OF PLANT AND MACHINERY ON HIRE USED, OR TO BE USED, IN THE PROSPECTING FOR, OR EXTRACTION OR PRODUCTION OF, MI NERAL OILS IN INDIA; AND (B) THE AMOUNT RECEIVED OR DEEMED TO BE RECEIVED I N INDIA BY OR ON BEHALF OF THE ASSESSEE ON ACCOUNT OF THE PROVISION OF SERVICES AND FACILITIES IN CONNECTION WITH, OR SUPPLY OF PLANT A ND MACHINERY ON HIRE USED, OR TO BE USED, IN THE PROSPECTING FOR, O R EXTRACTION OR PRODUCTION OF, MINERAL OILS OUTSIDE INDIA. 84 [(3) NOTWITHSTANDING ANYTHING CONTAINED IN SUB-SECT ION (1), AN ASSESSEE MAY CLAIM LOWER PROFITS AND GAINS THAN THE PROFITS AND GAINS SPECIFIED IN THAT SUB-SECTION, IF HE KEEPS AND MAINTAINS SUCH BO OKS OF ACCOUNT AND ITA NOS. 700 & 701/M/09 8 OTHER DOCUMENTS AS REQUIRED UNDER SUB-SECTION (2) O F SECTION 44AA AND GETS HIS ACCOUNTS AUDITED AND FURNISHES A REPORT OF SUCH AUDIT AS REQUIRED UNDER SECTION 44AB , AND THEREUPON THE ASSESSING OFFICER SHALL PROCEED TO MAKE AN ASSESSMENT OF THE TOTAL INCOME OR LOSS OF T HE ASSESSEE UNDER SUB- SECTION (3) OF SECTION 143 AND DETERMINE THE SUM PAYABLE BY, OR REFUNDABLE TO, THE ASSESSEE.] EXPLANATION.FOR THE PURPOSES OF THIS SECTION, (I) PLANT INCLUDES SHIPS, AIRCRAFT, VEHICLES, DR ILLING UNITS, SCIENTIFIC APPARATUS AND EQUIPMENT, USED FOR THE PURPOSES OF T HE SAID BUSINESS; (II) MINERAL OIL INCLUDES PETROLEUM AND NATURAL GAS.] IT CLEARLY SHOWS THAT THE ASSESSEE IS ENGAGED IN T HE BUSINESS OF PROVIDING SERVICES OR FACILITIES IN CONNECTION WITH ITS BUSINESS, THEREFORE, PROVISIONS OF SEC. 44BB CLEARLY APPLY ON THE FACTS OF THE CASE. THE AO HAS GROSSLY ERRED IN CONSIDERING PART OF THE INCOME OF THE ASSESSEE AS FEE FOR TECHNICAL SERVICES WITHOUT POINTING OUT WHICH P ART RELATES TO FTS. THE LD. CIT(A) HAS RIGHTLY CONSIDERED THE ENTIRE INCOM E TO BE TAXED U/S. 44BB OF THE ACT. 10. A CAREFUL PERUSAL OF THE VARIOUS DECISIONS RELI ED UPON BY THE ASSESSEE SHOWS THAT THE WORK/SERVICES DONE BY THE A SSESSEE DO NOT COME WITHIN THE PURVIEW OF SEC. 9(1)(VII) OF THE ACT. R ESPECTFULLY FOLLOWING THE DECISIONS OF THE TRIBUNAL, WE DO NOT FIND ANY R EASON TO INTERFERE WITH THE FINDINGS OF THE LD. CIT(A). ORDER OF THE LD. C IT(A) IS CONFIRMED. GROUND NO. 1 & 2 ARE ACCORDINGLY DISMISSED. 11. GROUND NO. 3 RELATES TO THE CHARGE OF INTEREST U/S. 234B OF THE ACT. THOUGH THE LEVY OF INTEREST IS MANDATORY BUT IN THE INSTANT CASE, SINCE THE INCOME OF THE ASSESSEE WAS LIABLE FOR DEDUCTION OF TAX AT SOURCE U/S. 195 OF THE ACT, DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN 313 ITR 187 WOULD APPLY. THE LD. DR STRONGLY PLACED RELIAN CE ON THE DECISION OF ITA NOS. 700 & 701/M/09 9 THE DELHI HIGH COURT IN THE CASE OF DIT-1, INTERNAT IONAL TAXATION VS ALCATEL LUCENT USA, INC WHEREIN THE HONBLE HIGH CO URT HAS CLEARLY HELD THAT ASSESSEE WOULD BE LIABLE FOR PAYING INTER EST U/S. 234B OF THE ACT. HOWEVER, SINCE WE ARE GOVERNED BY THE JURISDICTIONA L HIGH COURT DECISION, WE DO NOT FIND ANY REASON TO INTERFERE WI TH THE FINDINGS OF THE LD. CIT(A). NEEDLESS TO MENTION IN THE INSTANT CASE THE LEVY OF INTEREST WOULD BE , IN ANY CASE , CONSEQUENTIAL . GROUND NO. 3 IS ACCORDINGLY DISMISSED. ITA NO. 701/M/09 12. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APP EAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE ID. CIT (A) ERRED IN DIRECTING THE ASSESSI NG OFFICER TO ASSESS THE TOTAL RECEIPTS OF RS. 1,30,43,214/- UNDE R SECTION 44BB OF THE IT ACT, 1961 HOLDING THAT THE SUB-CONTRACT AGRE EMENT (WITH L & T FOR OFFSHORE INSTALLATION WORK UNDER CONSIDERATIO N) IS BEING A COMPOSITE ONE AND THE INCOME OF THE ASSESSEE IS TAX ABLE UNDER SECTION 44BB OF THE ACT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE ID. CIT(A) ERRED IN DIRECTING THE ASSESSIN G OFFICER THE RECEIPTS OF RS. 32,91,361/- TREATED AS FEES FOR TE CHNICAL SERVICES BE INCLUDED AS PART OF TOTAL CONSIDERATIO N OF SUB-CONTRACT RECEIPT AND TO BE ASSESSED AS PER THE PROVISIONS OF SECTION 44BB OF THE ACT. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE ID. CIT(A) ERRED IN HOLDING THAT SINCE THE ENTIRE INCOME OF THE ASSESSEE WAS LIABLE FOR DEDUCTION OF TAX AT SOU RCE UNDER SECTION 195 OF THE ACT, NO ADVANCE-TAX WAS PAYABLE AND CONS EQUENTLY, INTEREST UNDER SECTION 234B COULD NOT BE CHANGED. 13. IDENTICAL GRIEVANCES OF THE REVENUE HAVE BEEN C ONSIDERED BY US IN THE CASE OF VALENTINE MARITIME (GULF)LLC (VMGL) IN ITA NO. ITA NOS. 700 & 701/M/09 10 700/M/09 FOR ASSESSMENT YEAR 2005-06. AS FACTS AND ISSUES INVOLVED IN THIS APPEAL ARE IDENTICAL WITH THE FACTS AND ISSUES CONSIDERED BY US IN THE CASE OF VALENTINE MARITIME (GULF)LLC (VMGL) IN ITA NO. 700/M/09, FOLLOWING OUR OWN FINDING IN THE AFORESAID CASE, T HE APPEAL OF THE REVENUE IS DISMISSED. 14. IN THE RESULT, THE APPEALS FILED BY THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH NOVEMBER, 2013 . 4 / 3' % 5 67 27.11.2013 3 / > SD/- SD/- (B.R. MITTAL ) (N.K. BILLAIYA) /JUDICIAL MEMBER % / ACCOUNTANT MEMBER MUMBAI; 6 DATED 27 /11 /2013 . . ./ RJ , SR. PS 4 / ,0! ?!'0 4 / ,0! ?!'0 4 / ,0! ?!'0 4 / ,0! ?!'0 / COPY OF THE ORDER FORWARDED TO : 1. (+ / THE APPELLANT 2. ,-(+ / THE RESPONDENT. 3. @ ( ) / THE CIT(A)- 4. @ / CIT 5. !A> ,0 , , / DR, ITAT, MUMBAI 6. >B C / GUARD FILE. 4 4 4 4 / BY ORDER, -!0 ,0 //TRUE COPY// D DD D / E ) E ) E ) E ) (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI