ORIENT OVERSEAS CONTAINER LINE LIMITED ,MUMBAI V. DEPUTY COMMISSIONER OF INCOME TAX (INTERNATIONAL TAXATION) CIRCLE 3(2)(2), MUMBAI

ITA 2129/MUM/2025

AI Insights

The case involves Orient Overseas Container Line Limited, a foreign company engaged in shipping, appealing against the Final Assessment Order for the Assessment Year 2022-2023. The primary contention was the inclusion of GST in the deemed business income under Section 44B of the Income Tax Act, 1961, which the Assessee argued was incorrect based on previous Tribunal decisions. The Tribunal's decision favored the Assessee, aligning with its past rulings and rejecting the inclusion of GST in the income computation. Furthermore, the Tribunal also addressed the applicability of Section 115JB, confirming it does not apply to the Assessee's case as per the specific provisions meant for foreign companies engaged in shipping business.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 668981 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-06-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: I
• Assessment Year: 2022-2023
• Other Referred Cases: CIT v. Deepwater Pacific I Inc, Vantage International Management Co., CIT v. Transocean Offshore International Ventures Ltd., CIT (International Taxation) v. Schlumberger Asia Services Ltd., Boskalis International Dredging International CV, Mitchell Drilling International Pty Ltd., Sedco Forex International Inc., Knight Frank (India) Pvt. Ltd., Chamber of Tax Consultants v. Union of India, Schlumberger Asia Services Ltd.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ASSESSEE
• Keywords: Business income; Sale consideration of property below Jantri Value; Fair market value; Rule of consistency; TDS; Initiation of penalty proceedings; Deemed to accrue or arise in india; Double taxation relief; Presumptive income
• Section: 143(3); 68; 44AD; 139; 28; 43B; 115JB; 244A

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “I” BENCH, MUMBAI SHRI RAHUL CHAUDHARY, JUDICIAL MEMBER SHRI OMKARESHWAR CHIDARA, ACCOUNTANT MEMBER ITA No.2129/MUM/2025 (Assessment Year: 2022-2023) Orient Overseas Container Line Limited C/o. OOCL (India) Private Limited ICC Chambers, 5th Floor, Saki Vihar Road, Opp. Santogen Silk Mills, Powai, Mumbai - 400072.Maharashtra. [PAN:AAACO5679E] …………. Appellant Deputy Commissioner of Income-tax (International Taxation) Circle 3(2)(2), Mumbai 6th Floor, Kautilya Bhavan, Bandra Kurla Complex, Mumbai – 400051, Maharashtra. Vs …………. Respondent Appearance For the Appellant/Assessee For the Respondent/Department : : Shri Rajan Vora; Shri Lekh Mehta Shri Krishna Kumar Date Conclusion of hearing Pronouncement of order : : 10.06.2025 25.06.2025 O R D E R [ Per Rahul Chaudhary, Judicial Member: 1. The present appeal preferred by the Assessee is pertaining to Assessment Year 2022-2023 challenging Final Assessment Orders, dated 30/01/2025, passed by the Assessing Officer under Section 143(3) read with Section 144C(13) of the Income Tax Act, 1961 [hereinafter referred to as ‘the Act’], as per the directions issued by Commissioner of Income Tax [Dispute Resolution Panel (2)], Mumbai-1 [for short ‘DRP’], on 17/12/2024 under Section 144C(5) of the Act. 2. The Assessee has raised following grounds of appeal : “On the facts and in the circumstances of the case and in law, Orient ITA No.2129/Mum/2025 Assessment Year 2022-2023 2 Overseas Container Line Limited (hereinafter referred to as the 'Appellant') craves leave to prefer appeal against the order dated 30 January 2025 passed by the Deputy Commissioner of Income tax (International taxation) - Circle 3(2)(2), Mumbai (hereinafter referred to as the 'Ld. AO') under Section 143(3) read with Section 144C(13) of the Income-tax Act, 1961 (hereinafter referred to as 'the Act') pursuant to the directions dated 17 December 2024 of the Dispute Resolution Panel ('Ld. DRP') on the following grounds, each of which are independent of, and without prejudice to one another: 1. Ground 1: Assessment proceeding is non-jurisdictional 1.1. On the facts and circumstances of the case and in law, notice issued under section 143(2) of the Act being issued by Assistant Commissioner of Income-tax / Deputy Commissioner of Income-tax (International Taxation), Circle 1(1)(1), Delhi instead of Jurisdictional Assessing Officer [i.e. Deputy Commissioner of Income-tax (International Taxation)-Circle 3(2)(2), Mumbai] is devoid of jurisdiction. 2. Ground 2: Assessment proceeding is time-barred 2.1. On the facts and circumstances of the case and in law, the impugned assessment order is time barred, being passed after the time limit provided under section 153 of the Act. That it is settled position of law, that section 144C and section 153 of the Act are mutually inclusive and the overall time limit to complete the assessment is circumscribed by section 153 of the Act. 3. Ground 3: GST amount cannot be considered for the purpose of computing presumptive income under section 448 of the Act 3.1. On the facts and circumstances of the case and in law, the Ld. AO and Ld. DRP has erred in including an amount of Rs. 119,94,54,595, being the amount of GST charged, to the gross revenue for the purpose of computing presumptive income under section 44B of the Act. 3.2. On the facts and circumstances of the case and in law, the Ld. AO and Ld. DRP has erred in not following the order passed by the Mumbai Bench of Hon'ble income-tax Appellant Tribunal (ITAT') in Appellant's own case for AYs 2007-08, 2008-09, 2010-11, 2011-12, 2013-14, 2015-16, 2016-17 and 2020-21, wherein it has been held that service tax/GST is not includible for the purpose of computing presumptive income under Section 448 of the Act 3.3. On the facts and circumstances of the case and in law, the Ld. AO and Ld. DRP have breached the principle of consistency and principle of judicial discipline by not following the aforesaid decisions and directions. ITA No.2129/Mum/2025 Assessment Year 2022-2023 3 4. Ground 4: Incorrect computation of book profits under section 115JB 4.1. On the facts and circumstances of the case and in law, Ld AO has erred in computing book profits under section 115.JB at Rs. 1,25,89,94,787 without appreciating that section 115JB is not applicable to the Appellant in view of Explanation 4A to section 115JB(1). 5. Ground 5: Short grant of credit of Tax deducted at source (TDS') 5.1. On the facts and circumstances of the case and in law, Ld. AO has erred in restricting the credit of TDS to Rs. 6,67,38,636, as against TDS of Rs. 6,91,00,649 claimed by the Appellant in the return of income, thereby short grant of TDS credit by Rs. 23,62,013. 5.2. The Company has identified that the short TDS credit of Rs. 23,08,839 is in relation to the tax deducted on the interest under Section 244A by the jurisdictional assessing officer at the time of issuing refund for the AY 2015-16. 6. Ground 6: Short grant of credit of advance tax of Rs. 3,47,553 6.1. On the facts and circumstances of the case and in law, Ld. AO erred in restricting the credit of advance tax to Rs. 71,01,87,811 as against Rs. 71,05,35,364 claimed by the Appellant in the return of income, thereby short grant of advance tax credit by Rs. 3,47,553. 7. Ground 7: Erroneous levy of interest 7.1. On the facts and circumstances of the case, Ld. AO has erred in levying total interest of Rs.20,65,056 without providing any basis of such levy. 8. Ground 8: Initiation of penalty proceedings under section 270A 8.1. On the facts and in the circumstances of the case and in law, Ld. AO has erred in initiating penalty proceedings under section 270A of the Act without considering the fact that the Appellant has not underreported its income for the relevant AY. The above grounds of objections are distinct and separate and without prejudice to each other.” 3. The relevant facts in brief are that the Assessee, a foreign company tax resident of Hong Kong, was engaged in the business of operation of ships in international traffic and its revenue comprises of freight income and ancillary charges from carriage inward and outward ITA No.2129/Mum/2025 Assessment Year 2022-2023 4 during the relevant previous year. The Assessee filed return of income for the Assessment Year 2022-2023 declaring total income of INR.121,40,15,240/- after claiming the benefit of the Article 8 of the Agreement for Avoidance of Double Taxation between India and Honk Kong SAR (for short ‘Tax Treaty’] read with Section 90(2) and Section 44B of the Act in respect of the income from operation of ships. Section 44B of the Act contains special provisions for computation of profits & gains of shipping business in the case of non-residents. Section 44B(1) of the Act provides that notwithstanding anything to the contrary contained in Section 28 to 43A of the Act, 7.5% of the amount specified in Section 44B(2) shall be deemed to be profits & gains of the business of shipping business. Section 44B of the Act reads as under: “44B. Special provision for computing profits and gains of shipping business in the case of non-residents. (1) Notwithstanding anything to the contrary contained in sections 28 to 43A, in the case of an assessee, being a non-resident, engaged in the business of operation of ships, a sum equal to seven and a half per cent. of the aggregate of the amounts specified in sub-section (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 profession. (2) The amounts referred to in sub-section (1) shall be the following, namely:- (i) 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 carriage of passengers, livestock, mail or goods shipped at any port in India; and (ii) the amount received or deemed to be received in India by or on behalf of the assessee on account of the carriage of passengers, livestock, mail or goods shipped at any port outside India. [Explanation. - For the purposes of this sub-section, the amount referred to in clause (i) or clause (ii) shall include the amount paid or payable or received or deemed to be received, as the case may ITA No.2129/Mum/2025 Assessment Year 2022-2023 5 be, by way of demurrage charges or handling charges or any other amount of similar nature.” (Emphasis Supplied) Article 8 of the Tax Treaty provides that profits of an enterprise of a Contracting Party derived in the other Contracting Party from the operation of ships in international traffic may also be taxed in the other Contracting Party, but the tax imposed in that other Contracting Party shall be reduced by an amount equal to 50 per cent thereof. 4. The Assessing Officer was of the view that the Goods & Services Tax (GST) amount formed part of the amount specified in Section 44B(2) of the Act and therefore, 7.5% of the same should have been brought to tax as income of the Assessee in terms of the deeming provisions contained in Section 44B(1) of the Act. However, since the Assessee was entitled to claim benefit of Article 8 of the Tax Treaty, the Assessing Officer proposed addition of 50% of the aforesaid amount. Therefore, the Assessing Officer proposed disallowance of INR.4,49,79,547/- in the Draft Assessment Order, dated 28/03/2024, under Section 143(3) read with Section 144(C)(1) of the Act computed as under: Particulars Amount (INR) GST Amount 1,19,94,54,595/- Deemed Business Income as per Section 44B(1) [@ 7.5%] 8,99,59,095/- Income as per Article 8 of Tax Treaty [@ 50%] 4,49,79,547/- 5. The Assessee filed objections before the DRP and contended that the GST amount was not to be included in the amount specified while determining the deemed business income under Section 44B of the Act. It was submitted that the aforesaid contention of the Assessee had been accepted by the Mumbai Bench of the Tribunal in Assessee’s own case for the Assessment Years 2007-2008, 2008- 2009, 2010-2011, 2013-2014, 2015-2016 and 2016-2017 [ITA No.7089/Mum/2010, ITA No.7365/Mum/2012, ITA No.7494/Mum/2013, ITA No.457/Mum/2015, ITA No.2420/Mum/2017, ITA No.6796/Mum/2018 and ITA No.6929/Mum/2019]. However, the DRP rejected the ITA No.2129/Mum/2025 Assessment Year 2022-2023 6 objections observing that the aforesaid decisions of the Tribunal have not been accepted by the Revenue as appeal against the same has been preferred before the Hon’ble Bombay High Court. Thus, DRP vide Order, dated 17/12/2024, confirmed the action of the Assessing Officer in making the addition of INR.4,49,79,547/- giving following directions: “The Panel has perused the above decision of the DRP for Assessment Year 2020-21, wherein objections of applicant assessee were rejected with majority decision of 2:1. It is also noted that although Hon’ble ITAT has ruled in favour of the applicant assessee, the department has preferred appeal before the Hon’ble High Court of Mumbai. Since the facts are similar to that before the DRP in Assessment Year 2020-21, respectfully following majority decision of DRP in Assessment Year 2020-21, objections raised in ground of objection and sub objections 3 are rejected with consensus decision.” (Emphasis Supplied) 6. In view of the above, the Assessing Officer made addition of INR.4,49,79,547/- in the Final Assessment Order, dated 30/01/2025 passed under Section 143(3) read with Section 144C(13) of the Act and determined the assessed income as under: Particulars Amount(INR.) Total income as per return 1,21,40,15,240 Add: GST of INR.1,19,94,54,595/- x 7.5% presumptive business income x 50% as per Article-8 of India-Hong Kong DTAA 4,49,79,547 Assessed Total Income 1,25,89,94,787 7. Being aggrieved, the Assessee has preferred the present appeal before the Tribunal on the grounds reproduced at Paragraph 2 above. 8. We have heard both the parties and perused the material on record. Ground No.1 to 3 9. We would first take up Ground No. 3 raised by the Assessee challenging the addition of INR.4,49,79,547/- made by the Assessing Officer on merits. 10. On perusal of the directions issued by the DRP and the Final ITA No.2129/Mum/2025 Assessment Year 2022-2023 7 Assessment Order dated, 30/01/2025, passed by the Assessing Officer, it is clear that the issue under consideration stands decided in the favour of the Assessee and against the Revenue by the decision of the Tribunal in the case of the Assessee. The DRP had while rejecting the objections raised by the Assessee recorded that the Revenue had not accepted the decision of the Tribunal in the case of the Assessee wherein the Tribunal had ruled in the favour of the Assessee holding that the GST collections did not form part of the amounts specified under Section 44B(2) of the Act and therefore, the same could not have been included in receipts for the purpose of computing deemed business income in terms of Section 44B(1) of the Act. We have perused the aforesaid decision of the Co-ordinate Bench of the Tribunal in the Assessee’s own case for Assessment Year 2020-2021 [ITA No.3278/Mum/2013, dated 24/01/2024] wherein it has been held as under: “14. In case of presumptive taxation, deduction of expenses is not allowed i.e., purchase and inventory elements are to be ignored for computing deemed income under Section 44B, because the section starts with no-obstante clause overriding computation under sections 28 to 43. The deemed income has to be computed on specified amounts only and nothing more can be added which is not within the scope of Section 44B of the Act because Section 44B provides that non-resident is engaged in the business of operation of ships, then sum equal to 7.5% of the amounts referred to Sub-Section (2) has to be computed for the purpose of deemed profits. These amounts are firstly, the amount paid or payable (whether in or out of India) to the assessee or to any person on his behalf on account of carriage of passengers, livestock, mail or goods shipped at any port of India; and secondly, the amount received or deemed to be received in India by or on behalf of the assessee on account of the carriage of passengers, livestock, mail or goods shipped at any port outside India. Thus, what is relevant for computing the deemed income u/s.44B is the amount paid or payable or amount received or deemed to be received on account of carriage of passengers, etc. 15. Section 145A of the Act takes into consideration “valuation of sale of purchase of goods/services and of inventory”, whereas Section 44B(2) considers specified amount i.e.”amount paid or payable on account of the carriage of goods shipping at any ITA No.2129/Mum/2025 Assessment Year 2022-2023 8 port in India” and “amount received or deemed to be received on account of the carriage of goods shipped at any port outside India”. The terms amount paid or payable and amount received or deemed to be received mentioned under Section 44B cannot be replaced with the term ‘valuation’ in the absence of any specific enabling provisions under Section 44B or Section 145A of the Act or any other provisions of the Act. For instance, Section 50CA is a deeming provision which enables replacement of consideration with ‘fair market value’ where the amount of consideration is less than the fair market value determined in a prescribed manner. 16. Thus, in our view adding GST component to the deemed income which has to be computed directly on specified amounts i.e. amount paid or payable on account of carriage of goods shipped which is revenue element only. For the earlier regime of service tax prior to GST, there were various judicial precedents which upheld exclusion of service tax while computing the provision u/s 44B or other similar provisions. For instance, following judgments have been brought to our notice before us wherein the Hon'ble Courts has approved the exclusion of service tax. i. CIT v. Deepwater Pacific I Inc (SLP (Civil) Dairy No(S). 47374 of 2023, dated 13-12-2023) ii. Vantage International Management Co. [2023] 156 taxmann.com 23/296 Taxman 160 (SC) iii. CIT v. Transocean Offshore International Ventures Ltd. [2023] 157 taxmann.com 203/296 Taxman 570/459 ITR 609 (SC) iv. CIT (International Taxation) v. Schlumberger Asia Services Ltd. [2024] 158 taxmann.com 267/297 Taxman 1 (SC) Further, Hon'ble Bombay High Court in the case of Boskalis International Dredging International CV (supra) (followed the decision of Delhi High Court and Mitchell Drilling International Pty Ltd. (supra) and held as under: xx xx 17. Full Bench of Hon'ble High Court of Uttarakhand in case of Schlumberger Asia Services Ltd. (supra) held that service tax paid earlier by the assessee to Government of India is not on account of provision of services in connection with exploration and production of mineral oil, hence would not form part of aggregate taxable amount referred to in clauses (a) and (b) of sub-section(2) of section 44BB Relevant extract of the ruling is as under ITA No.2129/Mum/2025 Assessment Year 2022-2023 9 xx xx 18. Apart from that in the case of the assessee itself the Tribunal have consistently has been holding that service tax being in the nature of statutory payment does not involve any element of profit therefore, cannot be included in the gross receipts. 19. The case of the department before us is that the judgments rendered in the context of service tax could not be applicable under the new GST. We find that though GST has replaced by erstwhile service tax law to provide a single tax of supply of goods and services right from manufacture to consumer. For the sake of ready reference Section 68 of erstwhile Service Tax law and Section 49 of CGST Act, the comparison is given herein below. xx xx 20. On perusal of the comparison of the relevant provision of service tax law and GST law it can be seen that both are indirect taxes and is recovered by the service provider on behalf of assessee and as an agent of the Government as such rates are specified and thus, the provision under the service tax law are similar to provision of GST law and therefore, in our opinion the judicial precedents delivered in respect of erstwhile tax law would apply mutatis mutandis to the GST laws also. 21. Otherwise also it would be quirk of a fate that tax collected on behalf of the customer is again to be held as part of taxable income of the assessee who is collecting GST. The assessee is taxable person under the GST laws and shows GST separately in the invoice raised on the customers. We have perused the copy of the sample invoice produced before us at our direction wherein, it is seen that service charge is indicated separately and CGST is levied on such service charge is also indicated separately. If the GST services have been indicated in the invoice separately then it cannot be included for purpose of taxation while computing the income. For instance there are various TDS provisions and CBDT has clarified through various circulars that if GST services are indicated separately in the invoice then no tax would be deducted at GST components. By way of illustration following circulars have been referred to before us under various Sections. xx xx 22. If we accept the contention of the revenue, then it would lead to a situation where calculation of tax of reimbursement of taxes would tantamount to collection of tax on taxes. Section 44B(2) of the Act provides for deemed taxation on amount paid or payable/received on account of 'carriage' of goods, passengers, etc. Further, the Explanation thereto clarifies that the amounts in ITA No.2129/Mum/2025 Assessment Year 2022-2023 10 connection with the carriage would include 'demurrage charges', 'handling charges\" and other amounts of a 'similar nature\". Thus, what is sought to be included u/s 44B are the charges' recovered from the consignor of the cargo/customer as a consideration for transportation from a port in India to outside India and vice versa. 23. GST being a mandatory 'statutory levy' cannot be said to be in the nature of 'charges' by the shipping Company towards the carriage. The incidence of GST is on account of taxability of services under the relevant parliamentary statute i.e. GST laws and not on account of the business activities as envisaged in Sections 44B(2)(1) and 44B(2)(ii) of the Act. Otherwise, including GST in gross receipts for purpose of section 44B would be akin to charging income tax on GST i.e., tax on tax, which would promote cascading effect which cannot be the intent of legislation. 24. Further, a service provider acts in a fiduciary capacity out of statutory obligation casted upon it, while collecting service tax/GST on the behalf of exchequer and the same is ultimately deposited with the exchequer, hence there cannot be any iota of doubt that the impugned GST is not in the nature of specified income under Section 44B. 25. Thus, reliance placed by the Hon'ble DRP members in the case of Sedco Forex International Inc. (supra) to treat 'GST similar as 'reimbursement of mobilization charges is misplaced and incorrect In the case of Sedco Forex International Inc. (supra) fixed mobilization charges were agreed between the parties, which could be more or less than the actual expenditure. Thus, 'reimbursement of mobilization charges' cannot be equated with pure reimbursement which has no element of income. 26. The core argument of the department before us and by the id. DRP is that amendment in the provisions of Section 145A of the Act brought by Finance Act 2018, since it includes \"services\" within its code therefore, income has to be computed in accordance with Section 145A and any taxes levied under services is included and for that heavy reliance has been placed on the judgment of Hon'ble High Court of Bombay in the case of Knight Frank (India) Pvt. Ltd. (supra). However the Hon'ble Court held that Section 145A restricts its ambit only to valuation of purchase and sale of goods in inventory and would not apply to service tax billed on rendering of service as service tax billed has no relation to any goods nor does it have anything to do with bringing goods to a particular location. Section 145A which is for the method of accounting which starts with’ for the purpose of determining the income chargeable under the head ‘Profits and gains of ITA No.2129/Mum/2025 Assessment Year 2022-2023 11 business or profession’, being a general provision, would not apply to the special provisions of Section 44B of the Act. Further, the words “For the purpose of determining the income chargeable under the head “Profits and gains of business for profession….” in section 145A signifies that the essence of section is to compute income under the head profits and gains of business or profession which is computed as per provisions of Section 29 of the Act. On the contrary, provisions of Section 44B (1) starts with a non obstante clause “Notwithstanding anything to the contrary contained in sections 28 to 43A….”. Since Section 44B overrides the provisions of Section 29 of the Act, therefore in our opinion Section 145A is not applicable for computing deemed income under Section 44B. 27. Thus, the decision of the Hon'ble Bombay High Court will not be applicable in this case same was not rendered in the context of Section 44B and in any case in so far as the observation of the Hon'ble High Court that any tax or levy cannot be part of turnover receipts unless it is not paid, is not applicable in the case of the assessee it has been brought to record that assessee discharged its GST liability of Rs.96,51,49,085 through payment of tax to the Government Treasury and input tax credit and this has been demonstrated from the copies of form GSTR 9 and annual GST re-conciliation statement. 28. Further, Ld. DRP members also relied on CBDT Circular No. 10/2017 dated March 23, 2017 which discusses on the applicability of ICDS on determination of turnover by non corporate taxpayers covered under presumptive taxation like Sections 44AD, 44AE, 44ADA, 448, 44BB, 448BA, etc. and stated that the service receipts and sales in the instant case are to be valued inclusive of taxes, as per ICDS guidelines Relevant extract of Circular is hereunder- \"Question 3: Does ICDS apply to non-corporate taxpayers who are not required to maintain books of account and/or those who are covered by presumptive scheme of taxationlikesections44AD, 44AE, 44ADA 44B, 44BB, 44BBA, etc. of the Act? Answer: ICDS is applicable to specified persons having income chargeable under the head Profits and gains of business or profession' or 'Income from other sources. Therefore, the relevant provisions of ICDS shall also apply to the persons computing income under the relevant presumptive taxation scheme. For example, for computing presumptive income of a partnership firm under section 44AD of the Act, the provisions of ICDS on Construction Contract or Revenue recognition shall apply for determining he receipts or turnover, as the case may be.\" 29. Thus, reliance placed by the DRP on the aforesaid Circular is ITA No.2129/Mum/2025 Assessment Year 2022-2023 12 not valid since Delhi High Court in the case of Chamber of Tax Consultants v. Union of India [2017] 87 taxmann.com 92/252 Taxman 77/400 ITR 178 (Delhi) held that the aforesaid Circular was ultra vires the provisions of the Act and liable to be struck down. Also, the amendment was introduced vide Finance Act 2018 to bring certainty on the issue of applicability of ICDS and not to validate the circular. Even otherwise, in the aforesaid Circular, CBDT has also clarified that where there is a conflict between ICDS which is a general provision and specific provisions, specific provision shall prevail. 30. Before us, the plea was taken that if GST is to be added to the amounts paid on account of taxes then deduction of such GST is also required to be given u/s 43B Though the provision of Section 44B overrides Section 28-43A of the Act, but other sections including Section 43B are not specifically over ridden by Section 44B This issue has been decided by the Hon'ble Uttarakhand High Court in the case of Schlumberger Asia Services Ltd. (supra) wherein it has held that the benefit of deduction of tax can be claimed by the assessee in view of section 43B(a), while computing its income under section 28, and the provisions of section 43B would prevail notwithstanding anything contained in, among others. Thus, it has been stated that invoking the provisions of Section 43B under Section 44B shall force the assessee to prepare a memorandum account wherein the specified amounts are credited and adjusted by GST due to Section 145A and correspondingly, GST discharged before the due date of filing of tax return specified under Section 139 of the Act is debited to such account However, preparation of such memorandum account is neither required under the Act nor can replace the express provisions of Section 44B of the Act. We therefore, find merits in such contention of the Ld. Counsel that if it is held that Section 145A are applicable for computing deemed income u/s.44B and GST is added to the specified amounts and provisions of Section 29 are invoked, then deduction of GST paid should be allowed while computing income under the head ‘profit and gains’ of business or profession as per Section 43B. Even otherwise also Section 44B has to be allowed if it is paid on or before the due date and similarly it can be disallowed once GST has not been paid within the due date. However, this is purely academic, contention which has been raised because we have already held that for the purpose of Section 44B only specified amount mentioned in the sub-Section 2 of Section 44B alone is the subject matter of computation of profit @ 7.5% and Section 145A has no applicability. Thus we hold that while computing income u/s.44B, GST cannot be included and all the judgments relied upon by the assessee by the Hon’ble High Court and Hon’ble Supreme Court and the Tribunal will apply in this year also. Thus, in our opinion, the minority view of the single member of the DRP is to be upheld that GST cannot be included while computing deemed income u/s.44B, accordingly, this issue is decided in ITA No.2129/Mum/2025 Assessment Year 2022-2023 13 favour of the assessee.” 11. On perusal of above it can be seen that for the Assessment Year 2020-2021, the Tribunal had deleted identical addition made by the Assessing Officer by including GST amount in the amount specified in Section 44B(2) of the Act for the purpose of determining the deemed business income of the Assessee in terms of Section 44B of the Act. We note that for the Assessment Year 2022-2023, the DRP had only followed the directions for Assessment Year 2020-21. Therefore, respectfully following the above decision of the Tribunal in the case of the Assessee for the Assessment Year 2020-2021 [ITA No.3278/Mum/2013, dated 24/01/2024], we hold that the GST amount cannot be taken in to consideration while determining deemed business income of the Assessee as per Section 44B(1) of the Act. Accordingly, we delete the addition of INR.4,49,79,547/- made by the Assessing Officer. Thus Ground No.3 raised by the Assessee is allowed. Our above view draws strength from the following decisions of the Co-ordinate Benches of the Tribunal in the Assessee’s own case: Assessment Year ITA No. & Order dated 2007-2008 & 2008-2009 ITA No. 7089/Mum/2010, dated 17/05/2013 2010-2011 ITA No. 7494/Mum/2013, dated 31/07/2015 2016-2017 ITA No. 6929/Mum/2019 dated 07/01/2021 2015-2016 ITA No. 6929/Mum/2019 dated 07/01/2021 2013-2014 ITA No. 2420/Mum/2017, dated 20/11/2018 12. Since we have allowed Ground No.3 raised by the Assessee on merits, Ground No.1 and 2 raised by the Assessee are dismissed as having been rendered academic in view of the letter, dated 09/06/2025, filed by the Assessee. Ground No.4 13. Ground No. 4 raised by the Assessee pertains to applicability of the provisions contained in Section 115JB of the Act and the computation of ‘Book Profits’. ITA No.2129/Mum/2025 Assessment Year 2022-2023 14 14. In this regard we note that it is admitted position that the Assessee had offered income from operation of ships to tax under the deeming provisions contained in Section 44B of the Act read with Section 90(2) of the Act and Article 8 of the Tax Treaty. The Assesse claimed that in view of Explanation 4A to Section 115JB(1) of the Act the provisions of Section 115JB of the Act were not applicable to the Assessee. However, the Assessing Officer, in the computation sheet annexed to the Final Assessment Order, applied the provisions contained in Section 115JB of the Act and determined ‘Book Profits’ at INR.1,25,89,94,787/-. The Assessee is now in appeal before the Tribunal on this issue. 15. The provisions contained in Explanation 4A to Section 115JB(1) of the Act read as under: \"Explanation 4A: For the removal of doubts, it is hereby clarified that the provisions of this section shall not be applicable and shall be deemed never to have been applicable to an assessee, being a foreign company, where its total income comprises solely of profits and gains from business referred to in section 44B or section 44BB or section 44BBA or section 44BBB and such income has been offered to tax at the rates specified in those sections.” (Emphasis Supplied) 16. We note that in identical facts and circumstances, the Co-ordinate Benches of the Tribunal in the Assessee’s own case for Assessment Year 2020-2021 [ITA No.3278/Mum/2013, dated 24/01/2024] had held that the in view of the above Explanation 4A to Section 115JB(1) of the Act, the provisions of Section 115JB(1) were not applicable to the Assessee. The relevant extract of the decision of the Tribunal head as under: \"32. Ground No. 4 relates to computing of book profit u/s 115JB. Since assessee has offered income of operation of ships to tax under the deemed provisions of Section 44B r.ws 90(2) and Article 8 of India-Hong Kong Tax Treaty. Thus, in view of the Explanation 4A to Section 115JB(1), the provisions of Section 115JB are not applicable to the assessee. Accordingly, ground No 4 is allowed and the book profit computed by the ld. AO is ITA No.2129/Mum/2025 Assessment Year 2022-2023 15 deleted.” 17. Given that there is no change in the facts and circumstances of the case, respectfully following the above decision of the Tribunal in the case of the Assessee we hold that the provisions contained in Explanation 4A to Section 115JB(1) of the Act would be applicable to the Assessee, and therefore, the provisions contained in Section 115JB(1) of the Act would not be applicable to the Assessee for the Assessment Year 2022-2023. Hence, Ground No.4 raised by the Assessee is allowed. Ground No.5 18. Ground No. 5 raised by the Assessee pertains to short grant of credit of Tax Deducted at Source ('TDS') amounting to INR.23,62,013/-. The Assessing Officer is directed to verify the records and grant credit of TDS as per law. Ground No.6 19. Ground No. 6 raised by the Assessee pertains to short grant of credit of Advance Tax amounting to INR. 3,47,553/-. The Assessing Officer is directed to verify the records and grant credit of Advance Tax as per law. Ground No.7 20. Ground No. 7 pertains to levy of interest/Fee. The contention of the Assessee is that the Assessee is not liable to pay any interest under Section 234B/C/D of the Act of the Act in case correct credit for advance tax and TDS is given to the Assessee, The Assessee shall not be liable no interest under Section 234B/234C/234D of the Act. it is further contended that the Assessee will also not be liable to pay interest under Section 234A of the Act and fee under Section 234F of the Act as there is no delay in filing return of income. The Assessee has filed rectification application which is pending adjudication. In our view, the issues raised by the Assessee in Ground 7 are ITA No.2129/Mum/2025 Assessment Year 2022-2023 16 consequential in nature. Accordingly, Ground No. 7 is disposed off with the directions to the Assessing Officer to adjudicate the issues raised in the rectification application and re-compute the interest/fee, if any, as per law after while giving effect to the present order. In terms of the aforesaid, Ground No.7 raised by the Assessee is allowed for statistical purposes. Ground No.8 21. Ground No. 8 raised by the Assessee related to initiation of penalty proceedings under section 270A of the Act. The penalty proceedings are separate and independent from assessment proceedings. Therefore, Ground No. 8 is disposed off as being premature. 22. In result, in terms of paragraph 12 and 17 to 21 above, the present appeal preferred by the Assessee is allowed. Order pronounced on 25.06.2025. Sd/- Sd/- (Omkareshwar Chidara) Accountant Member (Rahul Chaudhary) Judicial Member म ुंबई Mumbai; दिन ुंक Dated : 25.06.2025 Milan,LDC ITA No.2129/Mum/2025 Assessment Year 2022-2023 17 आदेश की प्रतितिति अग्रेतिि/Copy of the Order forwarded to : 1. अपील र्थी / The Appellant 2. प्रत्यर्थी / The Respondent. 3. आयकर आय क्त/ The CIT 4. प्रध न आयकर आय क्त / Pr.CIT 5. दिभ गीय प्रदिदनदध ,आयकर अपीलीय अदधकरण ,म ुंबई / DR, ITAT, Mumbai 6. ग र्ड फ ईल / Guard file. आिेश न स र/ BY ORDER, सत्य दपि प्रदि //True Copy// उप/सह यक पुंजीक र /(Dy./Asstt. Registrar) आयकर अपीलीय अदधकरण, म ुंबई / ITAT, Mumbai "