Case Law Details
DCIT Vs Nabors Drilling International Limited (ITAT Mumbai)
Service tax not forms part of total turnover in computing income u/s 44BB
The issue involved in all these appeals is as to whether the ld CITA was justified in holding that the service tax component cannot be included as part of total turnover while computing income u/s 44BB(1) of the Act in the facts and circumstances of the case.
ITAT find that this issue is squarely covered in favour of assessee by the decision of Hon’ble Delhi High Court in the case of DIT vs. Mitchell Drilling International Pvt. Ltd. [2016] 380 ITR 130 (Del) and also CBDT Circular No. 1/ 2014 dated 13.01.2014, wherein it is clarified as under: –
The matter has been examined afresh. In exercise of the powers conferred under section 119 of the Act, the Board has decided that wherever in terms of the agreement/contract between the payer and the payee, the service tax component comprised in the amount payable to a resident is indicated separately, tax shall be deducted at source under Chapter XVII-B of the Act on the amount paid/payable without including such service tax component.
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