Sundowner Offshore International (Bermuda) Ltd., New Delhi V. DCIT (International Taxation), Dehradun

ITA 972/DEL/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 3315 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 9 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 25-02-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: G K DHALL
• Section: 143(3)

Judgement Text

PAGE | 1 INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B: NEW DELHI BEFORE SHRI KULDIP SINGH, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO. 972 /DEL/2016 (ASSESSMENT YEAR: 201 2 - 13 ) SUNDOWNER OFFSHORE INTERNATIONAL (BERMUDA) LTD, C/O. NANGIA & COMPANY, SUITE 4A, PLAZA M - 6, JASOLA, NEW DELHI PAN:AAACW8208M VS. DCIT (INTERNATIONAL TAXATION), CIRCLE - 2, SUBHASH ROAD, DEHRADUN (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI AMIT ARORA, CA REVENUE BY: SHRI GK DHALL, CIT DR DATE OF HEARING 27/11/2017 DATE OF PRONOUNCEMENT 2 7 /11/2017 O R D E R PER PRASHANT MAHARISHI , A. M. 1. THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD ASSESSING OFFICER DATED 30.01.2015 PASSED U/S 143(3) READ WITH SECTION 144C(3) (B) OF THE INCOME TAX ACT, 1961 FOR ASSESSMENT YEAR 2012 - 13 RAISING FOLLOWING GROUNDS OF APPEAL: - 1. THAT THE LD CIT(A) HAS ERRED ON FACTS AND IN LAW IN AFFIRMING THE ACTION OF THE AO IN HOLDING THAT THE AMOUNT AGGREGATING TO RS. 85435158 BEING THE PROPORTIONATE AMOUNT RECEIVED BY THE APPELLANT FOR MOBILIZATION OF THE RIG OUTSIDE INDIAN TERRITORIAL WATERS IS TO BE INCLUDED IN THE GROSS RECEIPTS U/S 44BB OF THE INCOME TAX ACT 1961 AS OPPOSED TO THE CLAIM OF THE APPELLANT THAT THE SAME DOES NOT CONSTITUTE INCOME CHARGEABLE TO TAX IN INDIA AS PER SECTION 5 READ WITH SECTION 9 OF THE INCOME TAX ACT. 2. THAT TH E LD CIT(A) HAS ERRED ON FACTS AND IN LAW IN AFFIRMING THE ACTION OF THE AO IN HOLDING THAT THE RECEIPTS ON ACCOUNT OF REIMBURSEMENT OF EXPENSES AMOUNTING TO RS. 342000/ - WERE INCLUDIBLE IN THE GROSS RECEIPTS FOR THE PURPOSE OF DETERMINATION OF INCOME U/S 44BB OF THE ACT AS OPPOSED TO THE CLAIM OF THE APPELLANT THAT THE SAME CANNOT GIVEN RISE TO INCOME FOR TAXATION PURPOSES. 2. THE BRIEF FACTS OF THE CASE IS THAT THE ASSESSEE IS ENGAGED IN PROVIDING SERVICES AND FACILITIES IN CONNECTION WITH EXPLORATION OF M INERAL OIL. IT FILED ITS RETURN OF INCOME FOR AY 2011 - 12 ON 29.09.2012 DECLARING INCOME OF RS. 200092310/ - . THE INCOME WAS OFFERED U/S 44BB OF THE INCOME TAX ACT. HOWEVER, THE CLAIM OF THE ASSESSEE IS THAT REIMBURSEMENT OF RS. SUNDOWNER OFFSHORE INTERNATIONAL (BERMUDA) LTD, VS. DCIT (INTERNATIONAL TAXATION), ITA NO. 972/DEL/2016 (ASSESSMENT YEAR: 2012 - 13) PAGE | 2 195130225/ - , RS. 85435158/ - A ND RS. 342000/ - ARE NOT INCLUDIBLE IN THE GROSS RECEIPTS FOR THE PURPOSE OF DETERMINING INCOME U/S 44BB OF THE ACT. THE LD ASSESSING OFFICER VIDE ORDER DATED 30.01.2015 INCLUDED ALL THE ABOVE RECEIPTS. THE ASSESSEE CONTESTED THE SAME BEFORE THE LD CIT(A) W HO DISMISSED THE APPEAL OF THE ASSESSEE WITH RESPECT TO THE ABOVE THREE REIMBURSEMENTS. 3. THE FIRST ISSUE IN THE APPEAL IS WITH RESPECT TO MOBILIZATION ADVANCE OF RS. 85435158/ - AND SECOND ISSUE WAS WITH RESPECT TO THE REIMBURSEMENT OF RS. 342000/ - WHETHER I NCLUDIBLE IN THE GROSS RECEIPT FOR DETERMINING INCOME OF THE ASSESSEE U/S 44BB OF THE ACT. 4. THE LD AR SUBMITTED THAT NOW THIS ISSUE IS SQUARELY COVERED BY THE DECISION OF THE HON'BLE SUPREME COURT IN CASE OF SEDCO FOREX INTERNATIONAL INCORPORATION VS. CIT 87 TAXMANN.COM 29 AGAINST THE ASSESSEE. THE LD CIT DR ALSO RELIED UPON THE SAME. 5. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS AND ALSO PERUSED THE ORDERS OF THE LOWER AUTHORITIES. THE ABOVE TWO ISSUES IN THE APPEAL OF THE ASSESSEE ARE SQUARELY COVE RED AGAINST THE ASSESSEE BY THE DECISION OF THE HON'BLE SUPREME COURT IN CASE OF SEDCO FOREX INTERNATIONAL INCORPORATION (SUPRA) WHEREIN IT HAS BEEN HELD THAT : A. THAT MOBILIZATION CHARGES ARE TO BE INCLUDED IN GROSS RECEIPTS FOR THE PURPOSE OF PROVISIONS OF SECTION 44BB OF THE INCOME TAX ACT, 1961 B. THE REIMBURSEMENT CHARGES ARE TO BE INCLUDED IN GROSS RECEIPTS FOR THE PURPOSE OF PROVISIONS OF SECTION 44BB OF THE INCOME TAX ACT, 1961 6. THEREFORE, THE APPEAL OF THE ASSESSEE WITH RESPECT TO BOTH THESE ABOVE ISSU ES ARE COVERED AGAINST THE ASSESSEE. HENCE, GROUND NO. 1 AND 2 OF THE APPEAL ARE DISMISSED. 7. IN THE RESULT APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 2 7 /11/2017. - S D / - - S D / - (KULDIP SINGH) (PRASH ANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 2 7 /11/2017 A K KEOT COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI