INCOME TAX ACT, 1961

Section 44B

Presumptive taxation under section 44B - Computation - Amount of service tax -

Assessee-foreign company incorporated under the law of Korea had filed its return of income. AO proposed the inclusion of service tax in the amount specified in section 44B and also levied interest under section 234B and initiated penalty proceedings 271(1)(c). Held: Keeping in view the judicial pronouncements especially recent Delhi High Court ruling in case of Mitchell Drilling International (P) Ltd. ITA No. 403/2013 and 384/2015, dt 28-9-2015 and Tribunal ruling in assessee's own case for assessment years 2007-08 and 2008-09, service tax being in the nature of statutory payment and was being collected on behalf of Government, therefore, it could not be included in the gross receipts for the purpose of computing presumptive income of assessee under section 44B. AO was directed to delete the addition on account of service tax, after verification of payments, proposed to be made under section 44B.

REFERRED : Director of Income Tax-I, Pr. CIT v. Mitchell Drilling International (P) Ltd. (2016) 380 ITR 130 (Del-HC) : 2015 TaxPub(DT) 3916 (Del-HC)

FAVOUR : In assessee's favour

A.Y. : 2012-13

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