Case Law Details
Western Geco International Ltd Vs DDIT (ITAT Delhi)
In the case of Western Geco International Ltd vs. DDIT (ITAT Delhi), the issue of whether reimbursement of service tax should be included in the gross turnover for computing taxable income under Section 44BB of the Act was examined.
The representatives of both parties agreed that the issue is settled in favor of the assessee based on the judgment of the Hon’ble Uttarakhand High Court in the case of Director of Income-tax International Taxation vs. Schlumberger Asia Services Ltd. It was held that the reimbursement of service tax, paid by the assessee to the Government of India and reimbursed by the service recipient (ONGC), does not form part of the aggregate amount referred to in Section 44BB(2) of the Act. A similar decision was rendered by the Hon’ble Delhi High Court in the case of Director of Income-tax vs. Mitchell Drilling International (P.) Ltd.
FULL TEXT OF THE ORDER OF ITAT DELHI
On account of difference of opinion between the learned Accountant Member and learned Judicial Member of ITAT, “C” Bench, New Delhi, this matter has been referred to me by the Hon’ble President, ITAT for consideration and disposal under Section 255(4) of the Income Tax Act, 1961.
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