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March 2016

Presumptive tax – Section 44BB – A. Y. 2008- 09 – Assessee non-resident – Prospecting for or production of mineral oils – Service tax collected by the assessee is not includible in gross receipts for the purposes of computation of presumptive income

By K. B. Bhujle Advocate
Reading Time 1 mins
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DIT vs. Mitchell Drilling International Pvt. Ltd.; 380 ITR 130 (Del):

Assessee is a non resident. For the A. Y. 2008-09, the income of the assessee was assessable u/s. 44BB. For computing the income the assessee did not include the service tax received by it. The Assessing Officer included the service tax. The Tribunal allowed the assessee’s claim.

On appeal by the Revenue, the Delhi High Court upheld the decision of the Tribunal and held as under:

“i) For the purpose of computing the presumptive income of the assessee for the purpose of section 44BB the service tax collected by the assessee on the amount paid to it for rendering services was not to be included in the gross receipts in terms of section 44BB(2) r.w.s. 44BB(1).

ii) The service tax is not an amount paid or payable, or received or deemed to be received by the assessee for the services rendered by it. The assessee only collected the service tax for passing it on to the Government.”

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