Siem Offshore Inc., Dehradun vs Department Of Income Tax

ITA NO.1811/Del/2013

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH "G", NEW DELHI BEFORE SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER AND SHRI H.S. SIDHU, JUDICIAL MEMBER I.T.A. No. 1811/DEL/2013 A.Y. : 2009-10 Asstt. Director of Income Tax, Intl. M/s Siem Offshore Inc., Taxation, VS. C/o Nangia & Co., 13-A, Subhash Road, 75/7, Rajpur Road, Aayakar Bhavan, Dehradun-248001 Dehradun - 248001 (PAN:AAKCS6466R) (APPELLANT) (RESPONDENT)

Department by : Sh. B.R.R. Kumar, Sr. DR Assessee by : Sh. Amit Arora, CA & Sh. Suraj Nangia, CA

Date of Hearing : 16-4-2015 Date of Order : 17-4-2015

ORDER

PER H.S. SIDHU : JM This appeal by the Revenue is are directed against the order of

the Ld. Commissioner of Income Tax (Appeals)-II, Dehradun dated

30.1.2013 pertaining to assessment year 2009-10 on the following

grounds:-

1. Whether on the facts and circumstances of the case

the CIT (A) has erred in not adjudicating the case on

merits holding merely that in appellants own case for A.Y.

2008-09 on identical facts income has been held

assessable under section 44BB.

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2. Whether on the facts and circumstances of the case

the CIT (A) has erred in bringing to tax the receipt of non-

resident from lease of vessel and crew to EMGS on

account of time charter agreement for assisting EMGS in

exploration of seabed and subsoil for data interpretation,

under section 44BB of the Act, instead of Royalty/F'I'S as

treated by the AO under Article 13 of the DTAA signed

between India and Norway.

3. Whether an the facts and circumstances of the case

the CIT (A) has erred in not appreciating the fact that

44BB does not cover "second leg" contracts, and that this

beneficial position is for assessee who are engaged in

prospecting for or extraction, or production of mineral oils

and not for assessee in leasing/time charter business.

4. Whether on the facts and circumstances of the case

the CIT (A) has erred in holding that income from

equipment rental is not chargeable under section 9(1)( vi)

of the I. T. Act, when under its exclusionary clause,

income in respect of "second leg" contracts in

leasing/time charter business are not covered under

section 44BB.

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5. Whether on the facts and circumstances of the case

the CIT (A) has erred in holding that the income of the

assessee was taxable under the presumptive provisions

of sec. 44BB, ignoring the fact that taxability under

section 44BB shall not apply in respect of income referred

to in section 44DA in view of the clarificatory proviso to

sec. 44BB and sec. 44DA.

6. Whether on the facts and circumstances of the case

the CIT(A) has erred in not appreciating the fact that

proviso to section 44DA brought about by the Finance Act

2011 was only clarificatory in nature and its application

has to be read into the main provisions, in view of the

decision of the Apex Court in the case of Sedco Forex

International Drilling v/s CIT.

7. Whether on the facts and circumstances of the case

the CIT(A) has erred in not adjudicating the issue of

taxability of gross receipts accruing to assessee against

pro data basis offered by assessee on merits, holding

that AO's action is upheld only for the purpose of 44 BB

computation.

8. Whether on the facts and circumstances of the case

the CIT (A) has erred in relying upon the decision of the

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ITAT in the case of Mls CGG VERITAS Services, SA in ITA

no. 46531Del/2010 which has not been accepted by the

department and against which appeal to the Hon'ble

Uttarakhand High Court is being filed.

9. Whether on the facts and circumstances of the case

the CIT (A) has erred in holding that interest under

section 234-B was not chargeable in this case by relying

upon the decision of Hon'ble Uttrakhand High court in the

case of Maersk (334 ITR 79) where as the department has

contested the issue and has filed SLP before the Apex

Court against in the case of Jacobs Civil Incorporated/

Mitsubishi involving similar issue.

10. The appellant prays for leave to add, amend, modify

or alter any grounds of appeal at the time of before the

hearing of the appeal."

2. Facts narrated by the Revenue Authorities are not disputed by

both the parties, therefore, need not been repeated here for the

sake of brevity.

3. At the time of hearing, Ld. Counsel of the assessee Shri Amit

Arora alongwith Shri Suraj Nangia has stated that the issues in

dispute have already been adjudicated and decided by the ITAT 'C'

Bench, New Delhi in a group cases in favor of the assessee, in which

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the assessee was also the party in ITA No. 5633/Del/2010 (A.Y.

2007-08) Siem Offsore Inc. C/o Emgee Corporation vs. Addl. DIT (Intl.

Taxation) vs. Addl. DIT (Intl. Taxation) decided on 11.6.2014. He

also draw our attention towards the finding of the ITAT in the case of

assessee on the issue in dispute passed in ITA No. 5631/Del/2010

(A.Y. 2006-07) Siem Offsore Inc. C/o Emgee Corporation vs. Addl. DIT

(Intl. Taxation) vs. Addl. DIT (Intl. Taxation) and ITA No.

5632/Del/2010 (A.Y. 2007-08) Siem Offsore Inc. C/o Emgee

Corporation vs. Addl. DIT (Intl. Taxation) vs. Addl. DIT (Intl. Taxation)

at pages 52 to 53 of the aforesaid order dated 11.6.2014.

Therefore, he requested that the present Appeal filed by the

Revenue may be dismissed.

4. On the contrary, Ld. DR relied upon the order of the Assessing

Officer and reiterated the contention raised in the grounds of

appeal, raised by the Department.

5. We have heard both the parties and perused the relevant material on available on record, especially the impugned order passed by the Ld. CIT(A) alongwith the order passed by this Bench as stated in para 3 as aforesaid. We are of the view that the Ld. First Appellate Authority has dealt this issue at Page 3 vide para no. 4.0 & 5.0 wherein he has followed his own order relevant for the asstt. year 2008-09 and decided the issue in dispute in favor of the assessee. For the sake of convenience, the relevant paragraph no. 4.0 & 5.0 of the impugned order is reproduced hereunder:-

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ITA NO.1811/Del/2013

"4.0 The first ground of appeal challenges the action of the Ld. AO in assessing income as "royalty" rather than u/s 44BB of the Act. The Ld. AR placed on record a copy of the Appellate Order in the Appellant's own case for A.Y. 2008-09 (Appeal No. 277/CIT(A)-II/2011-12, order dated 25.10.2012] in which on identical facts the income has been held assessable u/s. 44BB of the Act on the entire receipts (gross). Since the facts are the same in the present appeal, the income is directed to be assessed u/s. 44BB of the Act by adopting the gross receipts for working out taxable income.

5.0 The second ground challenges the levy of interest u/s. 234B of the Act. This issue is covered in favor of the Appellant due to the case of Maersk Company Ltd.

reported in 334 ITR 79 (UK)."

5.1 After going through the findings given by the Ld. CIT(A) in the impugned order as well as the order passed by the ITAT, 'C' Bench, New Delhi in a group cases, in which the assessee was also the party in ITA No. 5633/Del/2010 (A.Y. 2007-08) Siem Offsore Inc. C/o Emgee Corporation vs. Addl. DIT (Intl. Taxation) vs. Addl. DIT (Intl. Taxation) decided on 11.6.2014, we are of the considered view that the issue in dispute has already been adjudicated and decided by this Bench in assessee's own case, in its favor for the asstt. year 2007-08 in ITA No. 5633/Del/2010 (A.Y. 2007-08) decided on 11.6.2014. Respectfully, following the order of the Coordinate Bench, the appeal filed by the Revenue is dismissed. We direct the AO that the income of the assessee is to be assessed u/s. 44BB of the Act by adopting the gross receipts for working out taxable income.

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5.2 As regards another issue regarding levy of interest u/s. 234B of the I.T. Act. We find that this issue is also covered in favor of the assessee due to the case of Maersk Company Ltd. reported in 334 ITR 79 (UK).

5.3 Keeping in view of the aforesaid discussions and precedent, we are of the considered view that the order of the Ld. CIT(A) is a well reasoned order, which does not need any interference on our part, hence, we uphold the same on the issues in dispute, as aforesaid.

6. In the result, the Appeal filed by the Revenue stands

dismissed.

Order pronounced in the Open Court on 17/4/2015.

Sd/- Sd/-

[S.V. MEHROTRA] [H.S. SIDHU] ACCOUNTANT MEMBER JUDICIAL MEMBER

Date 17/4/2015 "SRBHATNAGAR" Copy forwarded to: - 1. Appellant -

2. Respondent - 3. CIT 4. CIT (A) 5. DR, ITAT

TRUE COPY By Order,

Assistant Registrar, ITAT, Delhi Benches

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