Ensco Maritime Ltd., New Delhi v. DDIT, Dehradun

ITA 2913/DEL/2010 | 2006-2007
Pronouncement Date: 29-10-2010 | Result: Dismissed

Appeal Details

RSA Number 291320114 RSA 2010
Assessee PAN AABCE1178P
Bench Delhi
Appeal Number ITA 2913/DEL/2010
Duration Of Justice 4 month(s) 19 day(s)
Appellant Ensco Maritime Ltd., New Delhi
Respondent DDIT, Dehradun
Appeal Type Income Tax Appeal
Pronouncement Date 29-10-2010
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 29-10-2010
Date Of Final Hearing 26-10-2010
Next Hearing Date 26-10-2010
Assessment Year 2006-2007
Appeal Filed On 10-06-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B : NEW DELHI BEFORE SHRI RAJPAL YADAV JM AND SHRI K.G.BANSAL A M ITA NO.2913/DEL/2010 ASSESSMENT YEAR : 2006-07 M/S ENSCO MARITIME LIMITED C/O NANGIA & COMPANY SUITE 4A PLAZA M-6 JASOLA NEW DELHI 110 025. PAN NO.AABCE1178P. VS. DY.DIRECTOR OF INCOME TAX INTERNATIONAL TAXATION DEHRADUN. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI AMIT ARORA CA. RESPONDENT BY : SHRI ASHWANI MAHAJAN CIT-DR. ORDER PER RAJPAL YADAV JM : THE PRESENT APPEAL IS DIRECTED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF LEARNED CIT(A) DATED 16.2.2010 PASSED FOR AY 2006-07. 2. THE GRIEVANCE OF THE ASSESSEE RELATES TO INCLUSI ON OF REIMBURSEMENT REVENUE AMOUNTING TO RS.2 24 21 980/- AS WELL AS MOBILIZATI ON OF RIG AMOUNTING TO RS.5 35 40 616/- IN THE TOTAL AMOUNT REFERRED TO IN SUB-SECTION (2) OF SECTION 44BB OF THE INCOME TAX ACT FOR CHARGING THE TAX. 3. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS A NON-RESIDENT COMPANY INCORPORATED UNDER THE LAWS OF BERMUDA. IT IS ENGA GED IN THE BUSINESS OF EXPLORATION AND PRODUCTION IN INDIA. IT HAS DECLAR ED ITS REVENUES ON ACCOUNT OF TWO CONTRACTS WITH B.G.EXPLORATION & PRODUCTION INDIA L TD. THE ASSESSEE HAD OFFERED ITS RECEIPTS TO TAX AT THE RATE OF 10% ACCORDING TO THE PROVISIONS OF SECTION 44BB OF THE IT ACT. IT HAS EXCLUDED A SUM OF RS.2 24 21 980/- ON THE GROUND THAT THIS MUCH AMOUNT WAS REIMBURSED BY B.G.EXPLORATION & PRO DUCTION INDIA LTD. ON THE ITA-2913/DEL/2010 2 EXPENDITURE INCURRED ON BEHALF OF THAT CONCERN. AC CORDING TO THE ASSESSEE IT IS NOT TAXABLE U/S 44BB OF THE IT ACT. SIMILARLY MOBILIZ ATION REVENUE ATTRIBUTABLE TO THE TRANSPORTATION OF THE RIG ENSCO 53 OUTSIDE INDIAN TERRITORIAL WATERS WAS EXCLUDED BY THE ASSESSEE FROM THE TOTAL RECEIPT MEANT FOR SE CTION 44BB. THE STAND OF THE ASSESSEE IS THAT BOTH THESE RECEIPTS ARE NOT INCLUD IBLE IN THE GROSS RECEIPTS UPON WHICH TAX AT THE RATE OF 10% U/S 44BB WAS TO BE LEV IED. 4. THE ASSESSING OFFICER REJECTED BOTH THESE CONTEN TIONS OF THE ASSESSEE AND INCLUDED BOTH THESE AMOUNTS IN THE TOTAL RECEIPT. 5. BEFORE THE LEARNED CIT(A) THE ASSESSEE REITERAT ED ITS CONTENTION. HOWEVER LEARNED CIT(A) SENT THE STATEMENT OF THE ASSESSEE F OR THE COMMENTS OF THE AO. THE AO SUBMITTED BEFORE THE FIRST APPELLATE AUTHORI TY THAT ISSUE IN DISPUTE IS SQUARELY COVERED AGAINST THE ASSESSEE BY THE DECISI ON OF HONBLE UTTARAKHAND HIGH COURT IN THE CASE OF CIT VS. HALLIBURTON OFFSH ORE SERVICES INC. 300 ITR 265. LEARNED CIT(A) HAS CONFRONTED THE ASSESSEE WI TH THE REMAND REPORT SUBMITTED BY THE AO. ON THE REMAND REPORT OF THE A O THE ASSESSEE MADE FOLLOWING SUBMISSIONS:- 1. WE ARE IN RECEIPT OF THE AOS COMMENTS DATED 7 TH JANUARY 2010 WHEREIN THE AO HAS STATED THAT THE ISSUE OF T AXABILITY OF MOBILIZATION/DEMOBILIZATION REVENUES AS WELL AS REI MBURSEMENT REVENUE IS COVERED BY THE ORDER OF THE HONBLE HIGH COURT OF UTTARAKHAND IN THE CASE OF CIT VS. HALLIBURTON OFFS HORE SERVICES INC. IN 300 ITR 263. 2. IN RESPONSE TO THE ABOVE WE SUBMIT THAT THE ABO VE ORDER HAS BEEN CHALLENGED IN THE HON'BLE SUPREME COURT OF IND IA AND THE ISSUE IS PRESENTLY IN LITIGATION. HOWEVER AS OF THE MOM ENT THE MATTER IS COVERED BY THE ORDER OF THE JURISDICTIONAL HIGH COU RT. FOLLOWING THE SAID ORDER BOTH REIMBURSEMENTS AND MOBILIZATION RE VENUE WOULD BE TAXABLE IN INDIA U/S 44BB OF THE I.T.ACT 1961. 3. IT MAY PLEASE BE NOTED THAT THE ABOVE SUBMISSION S ARE MADE WITHOUT PREJUDICE TO THE FACT THAT THE ASSESSEE IS OF THE OPINION THAT ITA-2913/DEL/2010 3 THE REIMBURSEMENT REVENUES AND MOBILIZATION REVENUE (TO THE EXTENT PERTAINING TO TRANSPORTATION OF THE RIG OUTSIDE IND IAN TERRITORIAL WATERS) IS NOT CHARGEABLE TO TAX IN INDIA. FURTHER THE ASSESSEE RESERVES ITS RIGHT TO AGITATE THESE ISSUES WITH THE RELEVANT APPELLATE AUTHORITIES. 6. THE LEARNED CIT(A) HAS GONE THROUGH THE SUBMISSI ONS OF THE ASSESSEE AS WELL AS OF THE AO. ON THE STRENGTH OF HONBLE UTTA RAKHAND HIGH COURTS DECISION IN THE CASE OF HALLIBURTON OFFSHORE SERVICES INC. ( SUPRA) HE REJECTED THE CONTENTIONS OF THE ASSESSEE AND HELD THAT BOTH THES E AMOUNTS ARE INCLUDIBLE IN THE TOTAL RECEIPT PROVIDED U/S 44BB FOR LEVY OF TAX AT THE RATE OF 10%. 7. BEFORE US LEARNED COUNSEL WAS UNABLE TO CONTROV ERT THE FINDING RECORDED BY THE LEARNED CIT(A). HE COULD NOT BRING ANY DECISIO N OF THE HON'BLE SUPREME COURT CONTRARY TO THE DECISION OF HON'BLE JURISDICT IONAL HIGH COURT. HIS SUBMISSION WAS THAT THE ISSUE IS PENDING IN THE HON 'BLE SUPREME COURT IN THE CASE OF CIT VS. HALLIBURTON OFFSHORE SERVICES INC. AND A SSESSEE ALSO WANTS TO KEEP THE ISSUE ALIVE. CONSIDERING HIS SUBMISSIONS WE DO NO T FIND ANY MERIT IN THE APPEAL. LEARNED FIRST APPELLATE AUTHORITY HAS RIGHTLY RELIE D UPON THE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT. ACCORDINGLY THE APPEAL OF THE ASSESSEE IS DISMISSED. 8. IN THE RESULT THE APPEAL OF THE ASSESSEE IS DIS MISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 29 TH OCTOBER 2010. SD/- SD/- (K.G.BANSAL) (RAJPAL YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 29.10.2010. VK. ITA-2913/DEL/2010 4 COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ITAT ASSISTANT REGISTRAR