Schlumberger Solutions Pvt. Ltd. Vs ACIT (ITAT Dehradun)
In Schlumberger Solutions Pvt. Ltd. vs ACIT, the ITAT Dehradun dealt with a Miscellaneous Application (M.A.) filed by the assessee seeking recall of an earlier tribunal order dated 29.11.2021 for Assessment Year 2010–11.
The original tribunal order had dismissed the Revenue’s appeal by holding that service tax does not form part of gross receipts for computing income under Section 44BB of the Income Tax Act. However, the assessee contended in the M.A. that the tribunal had misunderstood the actual issue involved in the appeal.
The assessee submitted that the Assessing Officer (AO) and Transfer Pricing Officer (TPO) had disallowed an unpaid service tax liability of ₹1,65,73,768 under Section 43B. This disallowance was deleted by the Dispute Resolution Panel (DRP) on the ground that the service tax amount was not routed through the Profit and Loss Account and no deduction had been claimed. Therefore, disallowance under Section 43B was not applicable.
The Revenue had filed an appeal before the tribunal against the DRP’s deletion of the disallowance. However, the tribunal, while deciding the appeal, framed the issue incorrectly as whether service tax forms part of gross receipts for the purpose of Section 44BB. The assessee argued that this was an error of fact since the actual issue pertained to disallowance under Section 43B and not computation under Section 44BB.
