Case Law Details
CIT Vs B.J. Services Co. Me Limited (Uttarakhand High Court)
Introduction: The judgment of the Uttarakhand High Court in the case of CIT Vs B.J. Services Co. Me Ltd. addresses the interpretation of Sections 44 BB(1) and 44 BB(2) of the Income Tax Act. The dispute revolves around the inclusion of service tax in the presumptive taxable income of the assessee.
Detailed Analysis: The Income Tax Appellate Tribunal, Dehradun Bench, New Delhi, adjudicated on the matter raised by the Revenue regarding the applicability of Sections 44 BB(1) and 44 BB(2) of the Income Tax Act. The central issue was whether service tax collected during the provision of services and facilities related to the prospecting for, extraction, or production of mineral oils in India should be considered in the computation of the presumptive taxable income of the assessee.
The Tribunal ruled in favor of the assessee, citing the Full Bench judgment of the Uttarakhand High Court in DIT (International Taxation) & others vs. Schlumberger Asia Services Limited. The Full Bench held that the reimbursement of service tax by the service recipient (ONGC) to the service provider (assessee) does not form part of the aggregate amount specified in Sections 44 BB(2)(a) and 44 BB(2)(b) of the Income Tax Act.
The appellant-Department argued that despite the tax effect being below the threshold for filing a Special Leave Petition before the Supreme Court in previous cases, the Full Bench judgment attained finality. However, the appellant contended that the Full Bench’s decision was based on the Delhi High Court’s ruling in DIT vs. Mitchell Drilling International (P.) Ltd.
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