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Section 44BB of the Income-tax Act, 1961 - Non-residents - Mineral oil, business for prospecting/exploration, etc., in case of - Assessment year 2003-04 - Whether reimbursed catering expenses and fuel expenses are parts of gross receipts for purpose of section 44BB - Held, yes FACTS The assessee was a non-resident company, engaged in the business of oil exploration. During the relevant assessment year, it received certain amount by way of reimbursement on account of catering charges and fuel expenses. The Assessing Officer included the said amount in the gross receipt of the assessee for the purpose of calculating the 10 per cent deemed profit under section 44BB. On appeal, the Commissioner (Appeals) deleted the said amount from the gross receipt of the assessee. On the revenue's appeal, the Tribunal upheld the action of the Commissioner (Appeals). On the revenue's appeal to the High Court: HELD Section 44BB makes a special provision for computing profits and gains of the non-resident assessees engaged in the business of exploration, etc., of mineral oils. Sub-section (1) provides that in respect of such assessees, notwithstanding anything contained in sections 28 to 41 and sections 43 to 43A, an assessee shall be deemed to have earned ten per cent profits on the amount mentioned in sub-section (2) received by him. The amount mentioned in sub-section (2) clearly shows that the amount paid to the assessee on account of provision of services and facilities in connection with the extraction or production of mineral oils, whether paid in or outside India, are to be included. The words used in the section include the amount paid on account of catering charges and fuel, etc., to the non-resident assessee involved in the business of oil exploration, as the catering charges do form part of 'services and facilities' in connection with the extraction or production of the mineral oil. [Para 6] Therefore, the catering charges and fuel expenses reimbursed cannot be excluded from the amount defined in sub-section (2) of section 44BB. That being so, the appellate authorities below had erred in holding that the catering charges and fuel expenses received by the assessee were…

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