Service Tax Collected in supply of plant and Machinery for Extraction of Mineral Oils in India Liable to be Included in amount of Presumptive  Taxable Income: Supreme Court Dismisses SLP [Read Order]

The Supreme Court has held that service tax collected in the supply of plant and machinery for extraction of mineral oils in India is liable to be included in the amount of presumptive taxable income and dismissed the Special Leave Petition (SLP). The SLP arose out of the impugned final judgment and order passed by the High Court of Uttarakhand.

The specific issue, that arose for consideration was, whether the service tax collected by the assessees, M/S Deepwater Pacific in the course of the provision of services and facilities in connection with, or supply of plant and machinery on hire, in the prospecting for, or extraction or production of, mineral oils in India, was liable to be included in the amount paid or payable for computation of the ‘presumptive taxable income’ of the assessee. While passing the impugned orders, the Tribunal was held in favour of the assessee.

The Full Bench held that the amount reimbursed to the assessee (service provider) by the ONGC (service recipient), representing the service tax paid earlier by the assessee to the Government of India, would not form part of the aggregate amount referred to in Clauses (a) and (b) of sub-section (2) of Section 44 BB of the Income Tax Act.

A two-judge bench of Justice B V Nagarathna and Justice Ujjal Bhuyan condoned the delay of 283 days in filing the Special Leave Petition. While dismissing the SLP, the Court refused to incline to interfere in the matter.

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates