Brief of the case: ITAT Delhi held in Siem Offshore Inc Vs Dy. DIT (International Taxation) that any payment received (whether in India or outside India) by an assessee who falls within sec 44BB would be taxed as per the provisions contained u/s 44BB. So the reimbursement of expenses would also be taxed u/s 44BB.
Facts of the case: The assessee had filed its return of income at Rs 8,95,72,982/- but later on it filed a submission with the AO in which it mentioned that it had by mistake also considered the reimbursement of payments which were not related with the Indian Operations so the same should not be included for calculating the taxable receipts u/s 44BB so its taxable receipts should be Rs 8,31,60,337.
Contention of the assessee: Assessee was of the view that as the 2 invoices against which it filed submissions which AO were not related with Indian Operations and also was the reimbursement of expenses, so should not be included in the taxable receipts for sec 44BB.
Contention of the revenue: Revenue was of the view that on the receipts which assessee was not including in the taxable receipts, TDS was deducted by the payer and the same was reflected in the TDS certificate of the assessee. Revenue relied on the case of CIT Vs Halliburton Offshore Services Inc.300 ITR 265 in which it was held that the reimbursement of expenses was also includible in the revenue as contemplated by sec 44BB of the IT Act. So the above 2 invoices should be included in the taxable receipts.
Held by ITAT: ITAT relied on the decision given by Hon’ble Uttrakhand High Court in the case of CIT Vs Halliburton Offshore Services Inc.300 ITR 265 in which it was held that all the payment and receipts (whether in India or outside India) would be deemed profits and gains of the assessee at 10% u/s 44BB and the income had been defined under sec 2(24) of the income tax act and sec 5 & sec 7 deal with income and accrued income and deemed income. Any payment received by assessee which falls under sec 44BB would be taxed as per provisions contained under it. So, even the reimbursement of expenses would be included while calculating the taxable receipts u/s 44BB.