Income Tax Appellate Tribunal Delhi Dcit, Dehradun vs M/S. Expro Gulf Ltd., Mumbai on 13 February, 2017 IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH 'B' NEW DELHI BEFORE : SHRI H.S. SIDHU, JUDICIAL MEMBER & SHRI L.P. SAHU, ACCOUNTANT MEMBER ITA No. 6589/Del./2014 Asstt. Year : 201112 D.C.I.T., Circle 1, vs. Expro Gulf Ltd., Intl. Taxation, Dehradun. C/o Okay Inds. Plot No. A35, Street No. 2, MIDC, Andheri (East), Mumbai. (PAN: AAACE 5272B). C.O. No. 221/Del./2015 (in ITA No. 6589/Del./2014) Asstt. Year : 201112 Expro Gulf Ltd., vs. D.C.I.T., Circle 1, C/o Okay Inds. Plot No. A35, Intl. Taxation, Dehradun. Street No. 2, MIDC, Andheri (East), Mumbai. (Appellant) (Respondent) Revenue by : Sh. Anil Kumar Sharma, Sr. DR Assessee by : Sh. Amit Arora, C.A. Date of hearing : 02.02.2017 Date of pronouncement : 13.02.2017 ORDER Per L.P. Sahu, Accountant Member: This appeal has been filed by the Revenue against the order of ld. CIT(A)II, Dehradun dated 04.09.2014 for the assessment year 201112 in 2 ITA No.6589/Del./2014 & CO No. 221/Del./2015 relation to order passed u/s. 143(3)/144C(3)(a) of the incometax Act, 1961 (in short 'the Act') on the following grounds : "1. Whether on the facts and circumstances of the case, the Ld CIT(A) has erred in holding that the revenue received by the assessee on account of the provision of facilities and technical services under Contracts with M/s ONGC and M/s Halliburton Offshore Services Inc. ('HOSI') was taxable u/s 44BB of the Income Tax Act, 1961 ('the Act') as opposed to Section 44DA read with section 9(1)(vii) of the Act. 2. Whether on the facts and circumstances of the case, the Ld CIT(A) has erred in ignoring the effect of the amendment brought in vide Finance Act, 2010 w.e.f. 01.04.2011, in terms of which income covered by section 44DA has been specially excluded from the scope of section 44BB for Asstt Years 201112 (the year under consideration) onwards. 2.1 Whether on the facts and circumstances of the case, the Ld CIT(A) has erred in ignoring the distinct scheme of taxation of Fees for Technical Services ('FTS') and Royalty and disregarding the insertion of proviso in section 44BB /44DA/115A and the rationale behind the introduction of said amendment in the Finance Bill 2010 in holding that the income of the assessee from the above services was covered under the presumptive provisions of section 44BB. 2.2 The Ld CIT(A) has erred in not appreciating the fact that even in terms of ratio of the judgment in the said of OHM Ltd [352, ITR 406 (Delhi)] cited by him, the provisions of section 44BB are not applicable where the scope of the services/facilities provided by an assessee is general in nature falling under section 44DA(l)of the Act. 2.3 The Ld CIT(A) has erred in mechanically following the decisions in the case of M/s OHM Ltd. without first adjudicating upon the issue as to whether and how the scope of the services/facilities rendered under the contracts is not general in nature and therefore, does not qualify as FTS u/s 9(1)(vii) of the Act taxable under section 44DA. 3. Whether on the facts and in the circumstances of the case, the Ld CIT(A) has erred in holding that the income earned by the assessee for imparting of services was eligible for treatment u/s 44BB of the Act, 3 ITA No.6589/Del./2014 & CO No. 221/Del./2015 without adjudicating the aspect of eligibility under the second limb of the exclusionary proviso (Explanation to section 9(1)(vii) of the I.T. Act, 1961) i.e. "for a project undertaken by the recipient" in terms of decisions of Hon'ble Delhi High Court in CIT Vs Rio Tinto Technical Services [2012TII03HCUKHANDINTL]. 5. Without prejudice to the generality of the ground relating to taxation of entire receipts as FTS, whether on the facts and in the circumstances of the case, the Ld CIT(A) has erred in holding that the amounts received as reimbursement of Service Tax are not includible in gross turnover even for the purpose of computing taxable