ADIT, Dehradun V. M/s. Oil and Natural Gas Corporation Ltd., Dehradun

ITA 176/DEL/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 7707 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-05-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 17-05-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 09-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P DAM KANUNJNA SENIOR
• Assessee Lawyers: KAVEESH SYAL
• Section: 143(3); 142(1); 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH E : NEW DELHI) BEFORE SHRI N.K. SAINI, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.176/DEL./2013 (ASSESSMENT YEAR : 2009-10) ADIT, INTERNATIONAL TAXATION, VS. M/S. OIL & NATURA L GAS DEHRADUN. CORPORATION LIMITED AS REPRESENTATIVE ASSESSEE OF M/S. CAMERON SINGAPORE PTE LTD. ONGC LIMITED, CORPORATE TAX DIVISION, ROOM NO.244, TEL BHAWAN, DEHRADUN. (PAN : AAACO1598A) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI KAVEESH SYAL, CA REVENUE BY : SHRI P. DAM KANUNJNA, SENIOR DR DATE OF HEARING : 17.05.2016 DATE OF ORDER : 24.05.2016 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : APPELLANT, ASSISTANT DIRECTOR OF INCOME TAX, INTER NATIONAL TAXATION, DEHRADUN (HEREINAFTER REFERRED TO AS T HE REVENUE), BY FILING THE PRESENT APPEAL SOUGHT TO SET ASIDE THE I MPUGNED ORDER DATED 18.10.2012 PASSED BY THE COMMISSIONER OF INCO ME-TAX (APPEALS)-II, DEHRADUN QUA THE ASSESSMENT YEAR 2009 -10 ON THE GROUNDS INTER ALIA THAT :- ITA NO.176/DEL./2013 2 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE, THE CIT(A) HAS ERRED IN BRINGING TO TAX THE RECEIPTS OF THE NON-RESIDENT FROM SUPPLY CHAIN FOR 10 BLOW OUT PREVENTS, TRAIN O NGC SHOP LABOUR, CLEANING OF EQUIPMENT, ONGC SHOP LABOUR ON PAINT, ASSEMBLY AND TESTING OF EQUIPMENT U/S 44BB OF THE A CT INSTEAD OF FTS (FEES FOR TECHNICAL SERVICES) AS COVERED UNDER SECTION 9(1 )VII OF THE ACT AND DULY TAXED AS SUCH BY THE AO. 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE THE CIT (A) HAS ERRED IN HOLDING THAT THE INCOME OF THE ASS ESSEE WAS TAXABLE UNDER THE PRESUMPTIVE PROVISIONS OF SEC 44B B AND IGNORING THE FACT THAT TAXABILITY U/S 44BB SHALL NO T APPLY IN RESPECT OF INCOME IN THE NATURE OF FTS FOR A PROJECT NOT UN DERTAKEN BY THE ASSESSEE, WHICH IS SQUARELY COVERED UNDER SECTION 4 4DA AND CORROBORATED BY CLARIFICATORY PROVISO TO SEC. 44BB AND SEC 44DA. 3. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE, THE CIT(A) HAS ERRED IN ACCEPTING THE CLAIM OF ASSESSEE REGARDING EXISTENCE OF PE IN APPEAL WHEN THE ASSESSEE HAD FAI LED TO DECLARE THIS IN HIS RETURN OR BEFORE THE ASSESSING OFFICER, TO PREVENT PROPER ENQUIRY AND AVOID HIGHER RATE OF TAX U/S 44DA. 4. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE THE CIT (A) HAS ERRED IN ADMITTING THE GROUND THAT AS PER S INGAPORE DT AA THE MAXIMUM RATE WOULD BE 10% AND ASSESSEE CANNOT C LAIM PIECEMEAL BENEFIT FROM BOTH THE STATUTE AND THE TRE ATY BY CLAIMING LOWER TAX RATE UNDER THE TREATY AND EXEMPTION UNDER THE ACT, AS PER ITS INCOME TAX RETURN. 5. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE THE CIT (A) HAS ERRED IN HOLDING THAT READING OF RETROSPECT IVITY CANNOT BE SUPPORTED WITHOUT APPRECIATING THE FACT THAT PROVIS O, TO SECTION 44DA BROUGHT IN BY THE FINANCE ACT 2011 WAS CLARIFI CATORY AND ITS APPLICATION HAS TO BE RED INTO THE STATUTE IN VIEW OF APEX COURT DECISION IN SEDCO FOREX INTERNATIONAL DRILLING V/S CIT. 6. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE THE CIT (A) HAS ERRED IN RELYING ON THE CASE OF GLOBAL INDU STRIES PACIFIC PTE LIMITED, WHICH IS DISTINGUISHABLE ON FACT IGNORING THAT AAR RULINGS ARE CASE AND FACT SPECIFIC. 7. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE THE CIT(A) HAS ERRED IN RELYING UPON THE DECISION OF TH E ITAT IN THE CASE OF M/S CGG VERITAS SERVICES, SA IN ITA NO.46531DE1/2010 WHICH HAS NOT BEEN ACCEPTED BY THE DEPARTMENT AND AGAINST WHICH APPEAL TO THE HON'BLE UTTRAKHAND HIGH COURT IS BEING FILED. 8. WITHOUT PREJUDICE, WHETHER ON THE FACTS AND CIRC UMSTANCES OF THE CASE THE CIT(A) HAS ERRED IN RELYING UPON TH E DECISION OF THE ITA NO.176/DEL./2013 3 ITA T IN THE CASE OF M/S CGG VERITAS FOR ALLOWING 4 4BB BUT IGNORED THE RATIONALE THAT THE NATURE OF SERVICES P ROVIDED BY THE ASSESSEE FOR A PROJECT NOT UNDERTAKEN BY IT ARE CLE ARLY FTS. 9. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE THE CIT (A) HAS ERRED IN HOLDING THAT INTEREST U/S 234B WAS NOT CHARGEABLE IN THIS CASE BY RELYING UPON THE DECISION OF HON'BL E UTTRAKHAND HIGH COURT IN THE CASE OF MAERSK (334 ITR 79) WHERE AS THE DEPARTMENT HAS CONTESTED THE ISSUE AND HAS FILED SL P BEFORE THE APEX COURT AGAINST IN THE CASE OF JACOBS CIVIL INCO RPORATED/ MITSUBISHI INVOLVING SIMILAR ISSUE. 10. THE APPELLANT PRAYS FOR LEAVE TO ADD, AMEND, MO DIFY OR ALTER ANY GROUNDS OF APPEAL AT THE APPEAL. 2. BRIEFLY STATED THE FACTS OF THE CASE ARE : DURIN G THE SCRUTINY PROCEEDINGS CONDUCTED BY THE REVENUE ON THE BASIS O F RETURN OF INCOME FILED BY THE ASSESSEE ON 29.09.2009 DECLARIN G INCOME AT RS.21,34,860/- QUA THE ASSESSMENT YEAR 2009-10. NO TICE UNDER SECTION 142(1) OF THE INCOME-TAX ACT, 1961 (HEREINA FTER THE ACT) ALONG WITH QUESTIONNAIRE WAS ISSUED AND IN RESPONSE THERETO, SHRI KAVEESH SYAL, DEPUTY MANAGER (F&A) AND SHRI B.S. RA WAT, FINANCE AND ACCOUNTS OFFICER APPEARED AND FILED REQ UISITE DETAILS. ASSESSEE EARNED THE REVENUE OF RS.2,04,83,587/- ON ACCOUNT OF CONTRACT NO.CW/BDA/MM/CAMERON/SERVICES/01/2006-07 DATED 20.12.2007. DURING THE YEAR UNDER ASSESSMENT , ASSESSEE WAS CALLED UPON TO SHOW CAUSE AS TO WHY THE REVENUE REC EIVED BY THE ASSESSEE BE NOT TREATED AS FEE FROM TECHNICAL SERVI CES, TO WHICH THE ASSESSEE FILED COMPREHENSIVE REPLY DATED 31.10.2011 . AO, BY INVOKING INSTRUCTION NO.1862 DATED 22.10.1990 ISSUE D BY CBDT ITA NO.176/DEL./2013 4 AND EXPLANATION 2 TO SECTION 9(1)(VII) OF ACT, CAME TO THE CONCLUSION THAT OPERATIONS FOR PROSPECTING FOR EXTR ACTION OR PRODUCTION OF MINERAL OIL ARE MINING OPERATION AND THAT THE EXPRESSIONS MINING PROJECT OR LIKE PROJECT WOULD CO VER RENDERING OF SERVICES LIKE IMPARTING OF TRAINING AND CARRYING OF DRILLING OPERATION FOR EXPLORATION OR EXPLOITATION OF OIL AN D NATURAL GAS AND FURTHER CAME TO THE CONCLUSION THAT THE PAYMENT FOR SUCH SERVICES TO A FOREIGN COMPANY WILL BE INCOME CHARGEABLE TO TAX UNDER THE PROVISIONS OF SECTION 44BB OF THE ACT AND NOT UNDER THE PROVISIONS FOR TAXATION OF FEES FOR TECHNICAL SERVICES CONTAIN ED U/S 115A READ WITH SECTION 44D ARE APPLICABLE IN THIS CASE. CONS EQUENTLY, THE AO MADE THE ADDITION ON THE TOTAL INCOME OF RS.2,90,01 ,410/- IN ACCORDANCE WITH THE PROVISIONS CONTAINED U/S 143(3) READ WITH SECTION144C(3)(B) OF THE ACT. 4. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT ( A) WHO HAS PARTLY ALLOWED THE SAME. FEELING AGGRIEVED, THE RE VENUE CAME UP IN APPEAL BEFORE THE TRIBUNAL BY WAY OF FILING THE PRESENT APPEAL. 5. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. ITA NO.176/DEL./2013 5 6. GROUNDS NO.1 TO 8 RAISED BY THE REVENUE IN THIS CASE LEAD TO THE SOLE QUESTION TO BE DETERMINED BY THE TRIBUNAL IS, AS TO WHETHER REVENUE OF RS.2,04,83,587/- EARNED BY THE A SSESSEE/ FOREIGN COMPANY FROM SUPPLY CHAIN FOR 10 BLOW OUT P REVENTS, TRAIN ONGC SHOP LABOUR, CLEANING OF EQUIPMENT, ONGC SHOP LABOUR ON PAINT, ASSEMBLY AND TESTING OF EQUIPMENT WAS TAXABLE UNDER PRESUMPTIVE PROVISIONS U/S 44BB OF THE ACT OR IS TO BE TAXED UNDER PROVISO TO SECTION 44BB AND SECTION 44D A AS INCOME IN THE NATURE OF FTS (FEE FOR TECHNICAL SERV ICES)? 7. LD. DR FOR THE REVENUE CHALLENGING THE IMPUGNED ORDER RELIED UPON THE ORDER PASSED BY THE AO. HOWEVER, O N THE OTHER HAND, THE LD. AR FOR THE ASSESSEE BY RELYING UPON T HE LAW LAID DOWN BY HONBLE SUPREME COURT IN JUDGMENT CITED AS OIL & NATURAL GAS CORPORATION LTD. VS. CIT - (2015) 376 ITR 306 ( SC) CONTENDED THE ISSUE IN CONTROVERSY IS SQUARELY COVE RED. 8. UNDISPUTEDLY, THE NON-RESIDENT ASSESSEE/FOREIGN COMPANY WAS ENGAGED BY OIL & NATURAL GAS CORPORATION LTD. V IDE CONTRACT DATED 20.12.2007 TO DEPLOY EXPERT TO HELP ESTABLISH THE SUPPLY CHAIN FOR 10 BLOW OUT PREVENTERS (BOPS), (II) TRAIN ONGC SHOP LABOUR FOR DIS-ASSEMBLY AND CLEANING OF EQUIPMENT, TRAIN MACHINIST AT VENDORS FOR ROUGH OUT AND FINISH MACHINE, TRAIN ONGC WELDERS AND IMPART TRAINING TO ONGC SHOP LABOUR ON PAINT, A SSEMBLY AND ITA NO.176/DEL./2013 6 TESTING OF EQUIPMENT. BOPS ARE ESSENTIAL EQUIPMENT FOR SAFE PRODUCTION OF MINERAL OIL AS THEY HELP CONTROL FORM ATION PRESSURE TO PREVENT ANY BLOW-OUTS. 9. ASSESSEE COMPANY CATEGORICALLY CLAIMED THAT THE WORK CARRIED OUT BY THE NON-RESIDENT IS IN CONNECTION WI TH THE EXPLORATION, EXTRACTION AND PRODUCTION OF MINERAL O ILS AND GAS AND AS SUCH, IS TO BE TAXABLE UNDER THE PRESUMPTIVE PRO VISIONS CONTAINED U/S 44BB OF THE ACT AND NOT AS FEES FOR T ECHNICAL SERVICES. HOWEVER, AO CONSIDERED THE PAYMENT TO CA RRY OUT THE AFORESAID WORK BY A NON-RESIDENT COMPANY AS FEE FOR TECHNICAL SERVICES AND INVOKED THE PROVISIONS OF SECTION 9(1) (VII) OF THE ACT AND CHARGED THE SAME TO TAX UNDER AMENDED PROVISO T O SECTION 44BB AND U/S 44D OF THE ACT. 10. HONBLE APEX COURT IN THE JUDGMENT IN OIL & NATURAL GAS CORPORATION LTD. (SUPRA) DECIDED THE IDENTICAL ISSUE IN ASSESSEES OWN CASE IN FAVOUR OF THE ASSESSEE AND OPERATIVE PA RT THEREOF IS REPRODUCED AS UNDER FOR READY REFERENCE :- 13. THE INCOME TAX ACT DOES NOT DEFINE THE EXPRESS ION MINES OR MINERALS. THE SAID EXPRESSIONS ARE FO UND DEFINED AND EXPLAINED IN THE MINES ACT, 1952 AND TH E OIL FIELDS (DEVELOPMENT AND REGULATION) ACT, 1948. WHI LE CONSTRUING THE SOMEWHAT PARI MATERIAL EXPRESSIONS APPEARING IN THE MINES AND MINERALS (DEVELOPMENT AN D REGULATION) ACT 1957 REGARD MUST BE HAD TO THE PROV ISIONS OF ENTRIES 53 AND 54 OF LIST I AND ENTRY 22 OF LIST II OF THE 7 TH SCHEDULE TO THE CONSTITUTION TO UNDERSTAND THE EXCLUSION OF MINERAL OILS FROM THE DEFINITION OF MI NERALS IN ITA NO.176/DEL./2013 7 SECTION 3(A) OF THE 1957 ACT. REGARD MUST ALSO BE H AD TO THE FACT THAT MINERAL OILS IS SEPARATELY DEFINED IN SECTION 3(B) OF THE 1957 ACT TO INCLUDE NATURAL GAS AND PET ROLEUM IN RESPECT OF WHICH PARLIAMENT HAS EXCLUSIVE JURISD ICTION UNDER ENTRY 53 OF LIST I OF THE 7TH SCHEDULE AND HA D ENACTED AN EARLIER LEGISLATION I.E. OIL FIELDS (REG ULATION AND DEVELOPMENT) ACT, 1948. READING SECTION 2(J) AN D 2(JJ) OF THE MINES ACT, 1952 WHICH DEFINE MINES AND MINERALS AND THE PROVISIONS OF THE OIL FIELDS (REGU LATION AND DEVELOPMENT) ACT, 1948 SPECIFICALLY RELATING TO PROSPECTING AND EXPLORATION OF MINERAL OILS, EXHAUS TIVELY REFERRED TO EARLIER, IT IS ABUNDANTLY CLEAR THAT DR ILLING OPERATIONS FOR THE PURPOSE OF PRODUCTION OF PETROLE UM WOULD CLEARLY AMOUNT TO A MINING ACTIVITY OR A MINI NG OPERATION. VIEWED THUS, IT IS THE PROXIMITY OF THE WORKS CONTEMPLATED UNDER AN AGREEMENT, EXECUTED WITH A NO N- RESIDENT ASSESSEE OR A FOREIGN COMPANY, WITH MINING ACTIVITY OR MINING OPERATIONS THAT WOULD BE CRUCIAL FOR THE DETERMINATION OF THE QUESTION WHETHER THE PAYMENTS MADE UNDER SUCH AN AGREEMENT TO THE NON-RESIDENT ASSESSE E OR THE FOREIGN COMPANY IS TO BE ASSESSED UNDER SECTION 44BB OR SECTION 44D OF THE ACT. THE TEST OF PITH AND SUB STANCE OF THE AGREEMENT COMMENDS TO US AS REASONABLE FOR ACCEPTANCE. EQUALLY IMPORTANT IS THE FACT THAT THE CBDT HAD ACCEPTED THE SAID TEST AND HAD IN FACT ISSUED A CIRCULAR AS FAR BACK AS 22.10.1990 TO THE EFFECT THAT MINING OPERATIONS AND THE EXPRESSIONS 'MINING PROJECTS' OR 'LIKE PROJECTS' OCCURRING IN EXPLANATION 2 TO SECTION 9(1 ) OF THE ACT WOULD COVER RENDERING OF SERVICE LIKE IMPARTING OF TRAINING AND CARRYING OUT DRILLING OPERATIONS FOR EXPLORATION OF AND EXTRACTION OF OIL AND NATURAL GA S AND HENCE PAYMENTS MADE UNDER SUCH AGREEMENT TO A NON- RESIDENT/FOREIGN COMPANY WOULD BE CHARGEABLE TO TAX UNDER THE PROVISIONS OF SECTION 44BB AND NOT SECTIO N 44D OF THE ACT. WE DO NOT SEE HOW ANY OTHER VIEW CAN BE TAKEN IF THE WORKS OR SERVICES MENTIONED UNDER A PARTICUL AR AGREEMENT IS DIRECTLY ASSOCIATED OR INEXTRICABLY CO NNECTED WITH PROSPECTING, EXTRACTION OR PRODUCTION OF MINER AL OIL. KEEPING IN MIND THE ABOVE PROVISION, WE HAVE LOOKED INTO EACH OF THE CONTRACTS INVOLVED IN THE PRESENT GROUP OF CASES AND FIND THAT THE BRIEF DESCRIPTION OF THE WO RKS COVERED UNDER EACH OF THE SAID CONTRACTS AS CULLED OUT BY THE APPELLANTS AND PLACED BEFORE THE COURT IS CORRE CT. THE SAID DETAILS ARE SET OUT BELOW. S.NO. CIVIL APPEAL NO WORK COVERED UNDER THE CONTRACT ITA NO.176/DEL./2013 8 1. 4321 DRILLING OF EXPLORATION WELLS AND CARRYING OUT SEISMIC SURVEYS FOR EXPLORATORY DRILLING. 2. 740 DRILLING, FURNISHING PERSONNEL FOR MANNING, MAINTENANCE AND OPERATION OF DRILLING RIG AND TRAINING OF PERSONNEL. 3. 731 DRILLING, FURNISHING PERSONNEL FOR MANNING, MAINTENANCE AND OPERATION OF DRILLING RIG AND TRAINING OF PERSONNEL. 4. 1722 FURNISHING SUPERVISORY STAFF WITH EXPERTISE IN OPERATION AND MANAGEMENT OF DRILLING UNIT. 5. 729 CAPPING INCLUDING SUBDUING OF WELL, FIRE FIGHTING. 6. 738 CAPPING INCLUDING SUBDUING OF WELL, FIRE FIGHTING. 7. 1528 ANALYSIS OF DATA TO PREPARE JOB DESIGN, PROCE DURE FOR EXECUTION AND DETAILS REGARDING MONITORING. 8. 1532 STUDY FOR SELECTION OF ENHANCED OIL RECOVERY PROCESSES AND CONCEPTUAL DESIGN OF PILOT TESTS. 9. 1520 ENGINEERING AND TECHNICAL SUPPORT TO ONGC IMPLEMENTATION OF CYCLIC STEAM STIMULATION IN HEAVY OIL WELLS. 10. 2794 ASSESSMENT AND PROCESSING OF SEISMIC DATA ALO NG WITH ENGINEERING AND TECHNICAL SUPPORT IN IMPLEMENTATION OF CYCLIC STEAM STIMULATION. 11. 1524 CONDUCTING RESERVOIR STIMULATION STUDIES IN ASSOCIATION WITH PERSONNEL OF ONGC. 12. 1535 LABORATORY TESTING UNDER SIMULATED RESERVOIR CONDITIONS. 13. 1514 CONSULTANCY FOR OPTIMAL EXPLOITATION OF HYDROCARBON RESOURCES. 14. 2797 CONSULTANCY FOR ALL ASPECTS OF COAL BED METHA NE 15. 6174 ANALYSIS OF DATA OF WELLS TO PREPARE A JOB DE SIGN. 16. 1517 GEOLOGICAL STUDY OF THE AREA AND ANALYSIS OF SEISMIC INFORMATION REPORTS TO DESIGN 2 DIMENSIONAL SEISMIC SURVEYS. 17. 7226 OPINION ON HYDROCARBON RESOURCES AND FORESEEA BLE POTENTIAL. 18. 7227 OPINION ON HYDROCARBON RESOURCES AND FORESEEA BLE POTENTIAL. 19. 7230 OPINION ON HYDROCARBON RESOURCES AND FORESEEA BLE POTENTIAL. 20. 6016 OPINION ON HYDROCARBON RESOURCES AND FORESEEA BLE POTENTIAL. 21. 6008 EVALUATION OF ULTIMATE RESOURCE POTENTIAL AND PRESENTATIONS OUTSIDE INDIA IN CONNECTION WITH PROMOTIONAL ACTIVITIES FOR JOINT VENTURE EXPLORATION PROGRAM. 22. 1531 REVIEW OF SUB-SURFACE WELL DATA, PROVIDE REPA IR PLAN OF WELLS AND SUPERVISE REPAIRS. 23. 733 REPAIR OF GAS TURBINE, GAS CONTROL SYSTEM AND INSPECTION OF GAS TURBINE AND GENERATOR. ITA NO.176/DEL./2013 9 24. 741 REPAIR AND INSPECTION OF TURBINES. 25. 737 REPAIR, INSPECTION AND OVERHAULING OF TURBINES. 26. 736 INSPECTION, ENGINE PERFORMANCE EVALUATION, INSTRUMENT CALIBRATION AND INSPECTION OF FAR TURBINES. 27. 1522 REPLACEMENT OF CHOKE AND KILL CONSOLES ON DRILLING RIGS. 28. 1521 INSPECTION OF GAS GENERATORS. 29. 1515 INSPECTION OF RIGS. 30. 2012 INSPECTION OF GENERATOR. 31. 1240 INSPECTION OF EXISTING CONTROL SYSTEM AND DEP UTING ENGINEER TO ATTEND TO ANY PROBLEM ARISING IN THE MACHINES. 32. 1529 INSPECTION OF DRILLING RIG AND VERIFICATION O F RELIABILITY OF CONTROL SYSTEMS IN THE DRILLING RIG . 33. 2008 EXPERT ADVICE ON THE DEVICE TO CLEAN INSIDES OF A PIPELINE. 34. 2795 FEASIBILITY STUDY OF RIG TO ASSESS ITS REMAIN ING USEFUL LIFE AND TO CARRY OUT STRUCTURAL ALTERATIONS . 35. 925 ENGINEERING ANALYSIS OF RIG. 36. 1519 IMPARTING TRAINING ON CASED HOLD PRODUCTION LOG EVALUATION AND ANALYSIS. 37. 1533 TRAINING ON WELL CONTROL. 38. 1518 TRAINING ON IMPLEMENTATION OF SIX SIGMA CONCEPTS. 39. 1516 TRAINING ON IMPLEMENTATION OF SIX SIGMA CONCEPTS. 40. 6023 TRAINING ON DRILLING PROJECT MANAGEMENT. 41. 2796 TRAINING IN SAFETY RATING SYSTEM AND ASSISTAN CE IN DEVELOPMENT AND AUDIT OF SAFETY MANAGEMENT SYSTEM. 42. 1239 TO DEVELOP TECHNICAL SPECIFICATION FOR 3D SEI SMIC API MODULES OF WORK AND TO PREPARE BID PACKAGES. 43. 1527 SUPPLY SUPERVISION AND INSTALLATION OF SOFTWA RE WHICH IS USED FOR ANALYSIS OF FLOW RATE OF MINERAL OIL TO DETERMINE RESERVOIR CONDITIONS. 44. 1523 SUPPLY, INSTALLATION AND FAMILIARIZATION OF S OFTWARE FOR PROCESSING SEISMIC DATA. THE ABOVE FACTS WOULD INDICATE THAT THE PITH AND SU BSTANCE OF EACH OF THE CONTRACTS/AGREEMENTS IS INEXTRICABLY CONNECTED WITH PROSPECTING, EXTRACTION OR PRODUCTIO N OF MINERAL OIL. THE DOMINANT PURPOSE OF EACH OF SUCH AGREEMENT IS FOR PROSPECTING, EXTRACTION OR PRODUCT ION OF MINERAL OILS THOUGH THERE MAY BE CERTAIN ANCILLARY WORKS CONTEMPLATED THEREUNDER. IF THAT BE SO, WE WILL HAV E NO HESITATION IN HOLDING THAT THE PAYMENTS MADE BY ONG C AND RECEIVED BY THE NON-RESIDENT ASSESSEES OR FOREI GN ITA NO.176/DEL./2013 10 COMPANIES UNDER THE SAID CONTRACTS IS MORE APPROPRI ATELY ASSESSABLE UNDER THE PROVISIONS OF SECTION 44BB AND NOT SECTION 44D OF THE ACT. ON THE BASIS OF THE SAID CONCLUSION REACHED BY US, WE ALLOW THE APPEALS UNDE R CONSIDERATION BY SETTING ASIDE THE ORDERS OF THE HI GH COURT PASSED IN EACH OF THE CASES BEFORE IT AND RESTORING THE VIEW TAKEN BY THE LEARNED APPELLATE COMMISSIONER AS AFFI RMED BY THE LEARNED TRIBUNAL. 11. AO PROCEEDED TO TREAT THE REVENUE RECEIPT UNDER CONSIDERATION AS FTS BY APPLYING THE AMENDMENT TO S ECTION 44BB AND 44DA RETROSPECTIVELY WHEREAS IT CAME INTO FORCE W.E.F. 1.4.2011, APPLICABLE TO AY 2011-12. HOWEVER, HONB LE SUPREME COURT IN THE JUDGMENT IN OIL & NATURAL GAS CORPORATION LTD. (SUPRA) SET THE CONTROVERSY AT REST BY HOLDING THAT THE SERVICES RENDERED BY THE NON-RESIDENT COMPANY TO THE OIL & N ATURAL GAS CORPORATION LTD. AS REFERRED IN PARA 8 OF THIS ORDE R VIDE CONTRACT DATED 20.12.2007, VIZ., TO DEPLOY EXPERT TO HELP ES TABLISH THE SUPPLY CHAIN FOR 10 BLOW OUT PREVENTERS (BOPS), (II) TRAIN ONGC SHOP LABOUR FOR DIS-ASSEMBLY AND CLEANING OF EQUIPMENT, TRAIN MACHINIST AT VENDORS FOR ROUGH OUT AND FINISH MACHINE, TRAIN ONGC WELDERS AND IMPART TRAINING TO ONGC SHOP LABOUR ON PAINT, A SSEMBLY AND TESTING OF EQUIPMENT. BOPS ARE ESSENTIAL EQUIPMENT FOR SAFE PRODUCTION OF MINERAL OIL AS THEY HELP CONTROL FORM ATION PRESSURE TO PREVENT ANY BLOW-OUTS, SQUARELY FALL IN THE CATEGOR Y OF THE WORK ITA NO.176/DEL./2013 11 HELD TO BE INEXTRICABLY CONNECTED WITH PROSPECTING EXTRACTION OR PRODUCTION OF MINERAL OIL AND NOT FTS AS TREATED BY THE AO. 12. SO, THE ASSESSEES CASE IS SQUARELY COVERED BY THE JUDGMENT CITED AS OIL & NATURAL GAS CORPORATION LTD. (SUPRA) RENDERED BY THE HONBLE SUPREME COURT AND AS SUCH, WE ARE OF TH E CONSIDERED VIEW THAT THE SERVICES RENDERED BY THE NON-RESIDENT COMPANY FALL WITHIN THE PURVIEW OF PRESUMPTIVE PROVISIONS OF SEC TION 44BB OF THE ACT. SO, THERE IS NO GROUND TO INTERFERE INTO THE FINDINGS RETURNED BY THE LD. CIT (A), HENCE GROUNDS NO.1 TO 8 ARE DETERMINED AGAINST THE REVENUE. 12. GROUND NO.9 QUA CHARGING OF INTEREST U/S 234B O F THE ACT BEING CONSEQUENTIAL IN NATURE NEEDS NO FINDINGS, HE NCE THE SAME IS ALSO DETERMINED AGAINST THE REVENUE. 13. IN VIEW OF WHAT HAS BEEN DISCUSSED ABOVE, THE P RESENT APPEAL FILED BY THE REVENUE IS HEREBY DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THIS 24 TH DAY OF MAY, 2016. SD/- SD/- (N.K. SAINI) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 24 TH DAY OF MAY, 2016 TS ITA NO.176/DEL./2013 12 COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT-II, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.