Canyon Offshore Inc., New Delhi vs Assessee
- CitationI.T.A. No.2396/Mum/2013
Ratio decidendi
The rule this decision rests on
The amount received by a non-resident assessee as reimbursement or payment for mobilization of vessels outside Indian territorial waters forms part of the gross receipts for the purpose of computing income under section 44BB of the Income Tax Act, 1961, and is therefore includible in the assessee's taxable receipts. Where the Tribunal finds that a High Court has already decided the same question against the assessee, and the assessee cannot point to any contrary authority of a higher court, the Tribunal is bound to follow that High Court decision and will not interfere with the order of the first appellate authority that applied it.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
BEFORE HON'BLE S/SHRI H.L. KARWA, PRESIDENT AND B.R.BASKARAN (AM) सव ी एच.एल. कावा, अ य एवं बी.आर.बा करन, लेखा सद य आयकर अपील सं./I.T.A. No.2396/Mum/2013 ( नधारण वष / Assessment Year :2009-10)
Canyon Offshore Inc. बनाम/ Asstt. Director of Income Tax C/o Nangia and Company, Vs. (International Taxation)-1(2), Suite 4A, Plaza M-6, Jasola, Scindia House, New Delhi-110025. Ballard Pier, Mumbai-400001 (अपीलाथ /Appellant) .. ( यथ / Respondent)
थायी ले ख ा सं . /जीआइआर सं . /PAN/GIRNo. :AADCC2922M
अपीलाथ ओर से / Appellant by : Shri Neeraj Agarwala यथ क ओर से/Respondent by Shri N K Chand.
सन ु वाई क तार ख / Date of Hearing : 1.1.2015 घोषणा क तार ख /Date of Pronouncement : 16.01.2015
आदे श / O R D E R
Per B.R.BASKARAN, Accountant Member:
The appeal filed by the assessee is directed against the order dated 13.12.2012 passed by Ld CIT(A)-10, Mumbai and it relates to the Act for assessment year 2009-10.
2. The assessee is aggrieved by the decision of the ld. CIT(A) in upholding the order of AO that the amount received on account of mobilization of vessals outside Indian territorial waters was forming part of gross receipts for the purpose of determination of income u/s 44BB of the Income Tax Act, 1961 (the Act).
2 ITA No.2396/Mum/2013 3. We have heard the parties and perused the record. We notice that the ld. CIT(A) has followed the decision rendered by the Hon'ble Uttarakhand High Court in the case of CIT V/s Halliburton Offshore Services Inc. (300 ITR 2651) and CIT V/s Sedco Forex Intl. Drilling Inc (299 ITR 238), in deciding the issue against the assessee. For the sake of convenience, we extract below the relevant observations and finding of ld. CIT(A) while upholding the decision of the AO:
"2. The assessee is a non-resident engaged in providing services and facilities such as supply of plant and machinery on hire in connection with oil exploration activities. It is resident of USA and has offered its income to the extent of Rs.194,05,77,139/- under the provisions of section 44BB of the Act. The AO noticed that the assessee has not included a sum of Rs.25,82,65,238/- which was incurred on account of mobilization as part of its taxable receipts u/s 44BB of the Act. In respect of this amount, the assessee relied upon the decisions of the Tribunal in the case of Saipem SPA V/s DCIT (83 ITD 213), DCIT V/s Sonata Offshore Drilling Inc. in ITA No.741/B/94, R and F Falcon Drilling co. V/s ACIT (14 SOT 281) and contended that the mobilization charges are in the nature of reimbursement, and hence need not be considered for the purposes of section 44BB. The assessee, at the same time, admitted that the Hon'ble Uttarakhand High Court in the case of CIT V/s Halliburton Offshore Services Inc. (300 ITR 2651) and CIT V/s Sedco Forex Intl. Drilling Inc (299 ITR 238) has held that mobilization and demobilization charge are part of the receipts to be considered for the purposes of section 44BB. The assessee has submitted that it wishes to keep the issue alive and raise it at a higher appellate forum even though these decisions of the Hon'ble Court are against it.
3. The AO on the other hand, has relied upon two decisions of the Hon'ble Uttarakhand High Court referred earlier and the recent ruling of the Authority for Advance Ruling (AAR) in the case of Western Geco International Limited in AAR No. 938 of 2010. Relying on these decisions, the AO has included the said sum in the total revenue consider4ed u/s 44AB.
4. The assessee's submissions are considered. Respectfully following the decisions of the Uttarakhand High Court in the above referred, the AO's action in considering this amount as part of receipts u/s 44BB is upheld."
3 ITA No.2396/Mum/2013 4. Since, the ld. IT(A) has followed the decision of Hon'ble Uttarakhand High Court and since the assessee could not show any other contrary decision, we do not find any reason to interfere with the order of ld. CIT(A).
5. In the result, the appeal of the assessee is dismissed.
The above order was pronounced in the open court on 16th Jan,2015.
घोषणा खुले यायालय म दनांकः 16th Jan 2015 को क गई ।
sd sd
(एच.एल. कावा/ H.L. KARWA) (बी.आर. बा करन,/ B.R. BASKARAN) अ य / PRESIDENT लेखा सद य/Accountant Member मब ुं ई Mumbai: th Jan, 2015.
व. न.स./ SRL , Sr. PS
आदे श क त ल प अ े षत/Copy of the Order forwarded to :
1. अपीलाथ / The Appellant
2. यथ / The Respondent.
3. आयकर आयु त(अपील) / The CIT(A)- concerned
4. आयकर आयु त / CIT concerned
5. वभागीय त न ध, आयकर अपील य अ धकरण, मब ुं ई / DR, ITAT, Mumbai concerned
6. गाड फाईल / Guard file.
आदे शानस ु ार/ BY ORDER, true copy सहायक पंजीकार (Asstt. Registrar) आयकर अपील य अ धकरण, मुंबई /ITAT, Mumbai
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