Global Offshore International Ltd., Gurgaon V. ADIT, Dehradun

ITA 5009/DEL/2012

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 5217 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 10 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 22-05-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 21-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SOMYA SINGH
• Section: 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C , NEW DELHI BEFORE SH. N. K. SAINI, AM AND SH. KULDIP SINGH, JM ITA NO. 5009/DEL/2012 : ASSTT. YEAR : 2009 - 10 GLOBAL OFFSHORE INTERNATIONAL S.A.R.L (FORMERLY KNOWN AS GLOBAL OFFSHORE INTERNATIONAL LTD., C/O SRBC & ASSOCIATES, GOLF VIEW CORPORATE TOWER - B, NEAR DLF GOLF COURSE, SECTOR - 42, GURGAON - 122002, HARYANA VS ASSTT. DIRECTOR OF INCOME TAX, (INTERNATIONAL TAXAT ION), DEHRADUN (APPELLANT) (RESPONDENT) PAN NO. AA CCG6760C ITA NO. 6336/DEL/2013 : ASSTT. YEAR : 2010 - 11 GLOBAL OFFSHORE INTERNATIONAL LTD. (NOW KNOWN AS TECHNIP MARINE BV), C/O BLOCK B1 - 701A, BOOMERANG CHANDIVALI FARM ROAD, NEAR CHANDIVALI STUDIO, ANDHERI (EAST), MUMBAI - 400072 VS ASSTT. DIRECTOR OF INCOME TAX, (INTERNATIONAL TAXATION), DEHRADUN (APPELLANT) (RESPONDENT) PAN NO. AACCG6760C ASSESSEE BY : SH. SALIL KAPOOR, ADV., SH. SANAT KAPOOR, ADV. & MS. SOMYA SINGH, ADV. REVENUE BY : NONE DATE OF HEARING : 03.08.2017 DATE OF PRONOUNCEMENT : 16 .08.2017 ORDER PER N. K. SAINI, AM: BOTH THESE APPEALS BY THE ASSESSEE ARE DIRECTED AGAINST THE SEPARATE ORDERS OF THE AO DATED 19.07.2012 AND 03.10.2013 FOR THE ASSESSMENT YEARS 2008 - 09 AND 2009 - 10 2 ITA NO. 5009/DEL/2012 ITA NO. 6336 /DEL/201 3 GLOBAL OFFSHORE INTERNATIONAL LTD. RESPECTIVELY PASSED U/S 143(3)/144C(13) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). 2. SINCE THE ISSUES INVOLVED ARE COMMON AND THE APPEAL S WERE HEARD TOGETHER SO THESE ARE BEING DISPOSED OFF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY. 3. THE APPEAL S FOR THE ASSESSMENT YEARS 2009 - 10 AND 2010 - 11 WERE FILED ON 21.09.2012 AND 29.11.2013 RESPECTIVELY AND WERE FIXED REGULARLY. THESE APPEALS COULD NOT BE DISPOSED OFF FOR THE REASONS THAT EITHER THE ASSESSEE OR THE DEPARTMENT SOUGHT ADJOURNMENT S . ON THE LAST THREE OCCASIONS, WHEN THE CASE S WERE FIXED ON 02.07.2017, 16.03.2017 & 22.05.2017 , THE LD. DR SOUGHT ADJOURNMENT . TODAY, WHEN THE CASE WAS FIXED FOR HEARING, T HE DEPARTMENT SOUGHT ADJOURNMENT ON THE FOLLOWING GROUND: THE CASE COULD NOT BE PREPARED DUE TO SHORTAGE OF TIME. 4. WE DO NOT SEE THE ABOVE GROUND FOR SEEKING THE ADJOURNMENT AS PROPER AND REASONABLE. THEREFORE, THE APPLICATION MOVED BY THE DEPARTMENT FOR SEEKING THE ADJOURNMENT IS REJECTED AND THE APPEALS ARE DECIDED EX - PARTE QUA THE DEPARTMENT ON MERIT AFTER HEARING THE LD. COUNSEL FOR THE ASSESSEE. 5. AT THE FIRST INSTANCE WE WILL DEAL WITH THE APPEAL IN ITA NO. 5009/DEL/2012 FOR THE ASSESSMENT YEAR 2009 - 10. FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEAL: 3 ITA NO. 5009/DEL/2012 ITA NO. 6336 /DEL/201 3 GLOBAL OFFSHORE INTERNATIONAL LTD. 1. BASED ON THE FACTS AND CIRC UMSTANCES OF THE CASE, THE LEARNED ASSESSING OFFICER HAS ERRED IN ASSESSING TOTAL INCOME AT RS. 205,674,480 A S AGAINST RETURNED INCOME OF RS.92,226, 650. 2. BASED ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED ASSESSING OFFICER HAS ERRED IN HOLDING THAT THE APPELLANT'S INCOME FROM SERVICES RENDERED TO SHIPPING CORPORATION OF INDIA ('SCI') IS NOT TAXABLE UNDER SECTION 44BB OF THE ACT. 3. BASED ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED ASSESSING OFFICER HAS ERRED IN HOLDING, THAT THE RE VENUES OF THE APPELLANT FROM ITS CONTRACT WITH SCI ARE TAXABLE AS FEES FOR TECHNICAL SERVICES. 4 . WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED ASSESSING OFFICER HAS ERRED IN LAW AND IN FACT, IN MAKING ARBITRARY ESTIMATE OF TAXABLE INCOME AT 25 PERCENT OF THE GROSS REVENUES FROM SERVICES RENDERED TO SCI DURING THE YEAR. 5. WITHOUT PREJUDICE TO THE ABOVE, THE APPELLANT SUBMITS THAT THE ARBITRARY ESTIM ATE OF TAXABLE INCOME AT 25 PERCENT OF GROSS REVENUES BY THE LEARNED ASSESSING OFFICER IS UNREASONABLE, EXCE SSIVE AND OUGHT TO BE REDUCED SUBSTANTIALLY. 6. BASED ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED ASSESSING OFFICER HAS ERRED IN LEVYING INTEREST UNDER SECTION 234B OF THE ACT WITHOUT APPRECIATING THE FACT THAT THE APPELLANT IS A NON RESIDENT ASSESSEE AND ITS ENTIRE REVENUES/RECEIPTS ARE SUBJECT TO TAX WITHHOLDING IN INDIA UNDER SECTION 195 OF THE ACT AND THE APPELLANT IS NOT LIABLE TO PAY INTEREST UNDER SECTION 234B OF THE ACT. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, VARY, OMIT, SUBSTITUTE OR AMEND THE ABOVE GROUNDS OF APPEAL, AT ANY 4 ITA NO. 5009/DEL/2012 ITA NO. 6336 /DEL/201 3 GLOBAL OFFSHORE INTERNATIONAL LTD. TIME BEFORE OR AT THE TIME OF HEARING OF THE APPEAL, SO AS TO ENABLE THE HONORABLE MEMBERS TO DECIDE THIS APPEAL ACCORDING TO LAW. 6. THE MAIN GRIEVANCE OF THE ASSESSEE IN THIS APPEAL VIDE GROUND NOS. 1 TO 5 RELATES TO THE ESTIMATION OF THE INCOME @ 25% OF THE GROSS REVENUES FROM THE SERVICES RENDERED TO SHIPPING CORPORATION OF INDIA (SCI) AND NOT ASSESSING THE INCOME U/S 44BB OF THE ACT AS CLAIMED BY THE ASSESSEE. 7. FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE A NON RESIDENT COMPANY FILED ITS RETURN OF INCOME ON 30.09.2009 DECLARING TOTAL INCOME OF RS.9,22,26,650/ - . LATER ON, THE CASE WAS SELECTED FOR SCRUTINY. THE ASSESSEE WAS ENGAGED IN THE EXECUTION OF TWO PROJECTS WITH BG EXPLORATION AND PRODUCTION INDIA LTD. AND SHIPPING CORPORATION OF INDIA LTD. RESPECTIVELY. THE ASSESSEE OFFERED INCOME FROM THOSE CONTRACTS TO TAX @ 10% OF THE GROSS RECEIPTS U/S 44BB OF THE ACT. WHEREAS, THE AO ALLOWED THE CLAIM U/S 44BB OF THE ACT IN RESPECT OF THE INCOME FROM CONTRACT WITH M/S BG EXPLORATION AND PRODUCTION INDIA LTD. BUT DID NOT ALLOW THE CLAIM FOR THE INCOME FROM SHIPPING CORPORATION OF INDIA LTD. BY HOLDING THAT IT WAS FEES FOR TECHNICAL SERVICE S U/S 9(1)(VII) OF THE ACT. HE ESTIMATED THE PROFIT LIABLE TO TAX @ 25% OF THE GROSS RECEIPTS FROM SHIPPING CORPORATION OF INDIA LTD. 8. THE ASSESSEE FILED THE OBJECTION S BEFORE THE DRP WHO DID NOT FIND MERIT IN THE OBJECTIONS BY OBSERVING AS UNDER: 5 ITA NO. 5009/DEL/2012 ITA NO. 6336 /DEL/201 3 GLOBAL OFFSHORE INTERNATIONAL LTD. IN VIEW OF THE FACT S O F THE CASE AND THE ABOVE STAND TAKEN BY THIS PANEL IN SIMILAR CASES, OBJECTION 2 THAT THE CASE OF TH E ASSESSEE IS COVERED BY SEC 44B B IS REJECTED. AS REGARDS OBJECTION 3 THAT THE SERVICES RENDERED BY THE ASSESSEE IS NOT FTS FOR THE PURPOSE OF SEC 9(1)( VII) , IT WOULD BE IN ORDER TO EXAMINE THE EXACT NATURE OF THE SERVICES RENDERED BY THE ASSESSEE. A PERUSAL OF THE M ASTER CON TRACT FOR SUBCONTRACT NO. OS/GLOBAL/DIVING/ MSVS/2008 - 09 BETWEEN SCI AND THE ASSESSEE SHOWS THAT ONGC IS OWNING TWO MULTIPURPOSE SUPPORT VESSE LS (NSVS) NAMELY SAM UDRA SEVAK AND SAMUDRA PRABHS WHICH HA VE BEEN ENTRUSTED BY ONGC TO SCI AND SCI IS TO PROVIDE MARINE AND DIVING SUPPORT, EXPERT MARINE /DIVING MANPOWER ON BOARD THESE MSVS. UNDER THE SUBCONTRACT SCI HAS ENGAGED THE ASSESSEE TO PROV IDE THESE SERVICES ONBOARD THE TWO VESSELS. THE SCOPE OF WORK AS LAID DOWN IN PARA 4 OF THE SUBCONTRACT SHOWS THAT IS MAINLY FOR PROVIDING DIVING SERVICES THROUGH EXPERT DIVERS TO BE DEPUTED BY THE ASSESSEE ONBOARD THE TWO VESSELS. A PERUSAL OF THE DEFINIT ION OF FTS AS PROVI DED IN EXPLANATION 2 TO SEC 9(1) (VII) SHOWS 'THE PROVISION OF SERVICES OF TECHNICAL OR OTHER PERSONNEL' IS SQUARELY COVERED BY IT. THE RATIO L AID DOWN BY UTTARKHAND HIGH COURT IN THE CASE OF ONGC AS AGENT OF FORAM ER FRANCE ALSO SUPPORTS THE STAND TAKEN BY THE A.O AS IN THAT CASE CONSIDERATION FOR THE PROVISION OF EXPERT PERSONNEL ABOARD THE SHIP OF ONGC WAS HEL D AS FEES FOR TECHNICAL SERVICES. IN VIEW OF THIS OBJECTION NO. 3 IS REJECTED. 4(2)(II I). OBJECTION NO. 4 RELATE TO ESTIMATION OF THE PROFITS FROM THE CONTRACT WITH SCI AT A RATE OF 25% OF THE GROSS RECEIPTS, IT IS SEEN THAT ROYALTY/FEES FOR TECHNICAL S ERVICES IS TAXABLE UNDER THE I. T ACT AT A RATE OF 10% ON GROSS RECEIPTS BASIS, IF THE INCOME OF THE ASSESSEE IS ESTIMATED AT 25% OF THE GROSS RECEIPTS AND THEN TAXED AT THE RATE OF 40% APPLICABLE T O A FOREIGN COMPANY, THE NET TAX COMES TO THE SAME FIGURE AS TAX OF 10% ON GROSS RECEIPTS WHICH 6 ITA NO. 5009/DEL/2012 ITA NO. 6336 /DEL/201 3 GLOBAL OFFSHORE INTERNATIONAL LTD. IS APPLICABLE TO ROYALTY/FTS IN THE CASE OF A FOREIGN COMPANY. DURING THE HEARING BEFORE THIS P ANEL THE A.R ARGUED THAT BASED ON MARGI N ANALYSIS OF SUITABLE COMPARABL E COMPANIES THE ESTIMATED INCOME SHOULD BE COMPUTED AT 6.51% OF THE GROSS REVENUE. A RE FERENCE TO THE LIST OF COMPARABL ES CITED BY THE A.R SHOWS THAT IT INCLUDES COMPANIES LIKE EF CONS INFRASTRUCTURE, ENGINEERS INDIA LTD, GAMMON INDIA, HINDUSTAN CONSTRUCTION, LARSEN AND TOUBRO, NAGARJUNA CONSTRUCTION CO. ETC, WHICH ARE IN THE FIELD OF CIVIL CONSTRUCTION. ON THE OTHER HAND THE SERVICES RENDERED BY THE ASSESSEE TO SCI, AS DISCUSSED ABOVE, IS THAT OF PROVIDING DIVING SERVICES WHICH IS IN NO MANNER COMPARABLE IN THE TERMS OF FUNCTIONS PERFORMED. THEREFORE THIS SUBMISSION DESERVES TO BE REJECTED. FURTHER, AS THE ASSESSEE HAS NOT MAINTAINED ANY BOOKS OF ACCOUNTS, THERE IS NO WAY TO DETERMINE TH E QUANTUM OF EXPENDITURE INCURRED FOR PROVIDING THE SERVICES TO WORK OUT A PROFIT MARGIN. IN VIEW OF THIS THE OBJECTION MADE, B Y THE ASSESSEE IS NOT SUSTAINABL E. THE A.O IS DIRECTED TO TAX THE INCOME FROM CONTRACTS FOR VESSEL HIRING AND RENDERING OF TECHNI CAL SERVICES TO SCI AS FEES FOR TECHNICAL SERVICES, AS PROPOSED IN THE DRAFT ORDER. 9 . ON THE DIRECTION OF THE LD. DRP, THE AO DETERMINED THE INCOME FROM SHIPPING CORPORATION OF INDIA AT RS.18,90,79,715/ - BY OBSERVING AS UNDER: WITH RESPECT TO GROUND N O. 2, 3 & 4 REGARDING NOT ASSESSING INCOME UNDER SECTION 44BB OF THE ACT, R EGARDING TAXABILITY OF ASSESSEE S INCOME AS FEES FOR TECHNICAL SERVICES AND REGARDING ESTIMATION OF INCOME 25% OF GROSS REVENUES, THE DRP HAS OBSERVED AS UNDER: - IN VIEW OF THE FACTS OF THE CASE AND THE ABOVE STAND TAKEN BY THIS PANEL IN SI M ILAR CASES, OBJECTION 2 THAT THE CASE OF THE ASSESSEE IS C OVERED BY SEC. 44BB IS REJECTED. AS REGARDS 7 ITA NO. 5009/DEL/2012 ITA NO. 6336 /DEL/201 3 GLOBAL OFFSHORE INTERNATIONAL LTD. OBJECTION 3 THAT THE SERVICES RENDERED BY THE ASSESSEE IS NOT FTS FOR THE PURPOSE OF SEC. 9(1)(VII ), IT WOULD BE IN ORDER TO EXAMINE THE EXACT NATURE OF THE SERVICES RENDERED BY THE ASSESSES. A PERUSAL OF THE MASTER CONTRACT FOR SUB CONTRACT NO. OS/GLOBAL /D1VING/MSV/ 2008 - 09 BETWEEN SCI AND THE ASSESSEE SHOWS THAT ONGC IS OWNING TWO MULTIPURPOSE SUPPORT VESSELS (NSVS) NAMELY SAMUDRA SEVAK AND SAMUDRA PRAB HS WHICH HAVE BEEN ENTRUSTED BY ONGC TO SCI AND SCI IS TO PROVIDE MARINE AND DIVING SUPPORT, EXPERT MARINE/DIVING MANPOWER ON BOARD THESE MS VS. UNDER THE SUBCONTRACT SCI HAS ENGAGE D THE ASSESSEE TO PROVIDE THESE SERVICES ONBOARD THE TWO VESSELS. THE SCOPE OF WORK AS LAID DOWN IN PARA 4 OF THE SUBCONTRACT SHOWS THAT IS MAINLY FOR PROVIDING DIVING SERVICES THROUGH EXPERT DIVERS TO BE DEPUTED BY THE ASSESSEE ONBOARD THE TWO VESSELS. A PERUSAL OF THE DEFINITION OF FTS AS PROVI DED IN EXPLANATION 2 OF SEC, 9(1 )(VII) SHOWS 'THE PROVISION OF SERVICES OF TECHNICAL OR OTHER PERSONNEL IS SQUARELY COVERED BY IT. THE RATIO LAID DOWN BY UTT ARAKHAND HIGH COURT IN THE CASE OF ONGC AS AGENT OF FORAMER FRANCE ALSO SUPPO RTS THE STAND TAKEN BY THE A.O. AS IN THAT CASE CONSIDERATION FOR THE PROVISION OF EXPERT PERSONNEL ABROAD THE SHIP OF ONGC WAS HELD AS FEES FOR TECHNICAL SERVICES. IN VIEW OF THIS OBJECTION NO. 3 IS REJECTED'. DRP HAS FURTHER DIRECTED AND OBSERVED W ITH REGARD TO ESTIMATION OF INCO ME 25% OF GROSS REVENUES THAT ' A REFERENCE TO THE LIST OF COMPARABLES CITED BY THE A.R SHOWS THA T IT INCLUDES COMPANIES LIKE EF CONS INFRASTRUCTURE , ENGINEERS INDIA LTD. , GAMMON INDIA, HINDUSTAN CONSTRUC TION, LARSEN AND TOUB RO, NAGARJUN A CONSTRUCTION CO. ETC. , WHICH ARE IN THE F IELD OF CIVIL CONSTRUCTION. ON T HE OTH ER HAND THE SERVICES RENDERED BY THE ASSESSEE TO SCI, AS DISCUSSED ABOVE, IS THAT OF PROVIDING DIVING SERVICES WHICH IS IN NO MANNER COMPAR ABLE IN THE TERMS OF FUN CTIONS P ERFORMED. THEREFORE THIS SUBMISSION DESERVES TO BE REJECTED. FURTHER , AS THE ASSESSEE HAS NOT MAINTAINED ANY 8 ITA NO. 5009/DEL/2012 ITA NO. 6336 /DEL/201 3 GLOBAL OFFSHORE INTERNATIONAL LTD. BOOKS OF ACCOUNTS, THERE IS NO WAY TO DETERMINE THE QUANTUM OF EXPENDITURE INCURRED FOR PROVIDING THE SERVICES TO WORK OUT A PROFIT MARGIN. IN VIEW OF THIS THE OBJECTION MADE BY THE ASSESSES IS NOT SUST AINABLE . THE A.O IS DIRECTED TO TAX THE INCOME FROM CONTRACTS FOR VESSEL HIRING AND RENDER ING OF TECHNICAL SERVICES TO SCI AS FEES FOR TECHNICAL SERVICES, AS PROPOSED IN THE DRAFT ORDER.' 10 . NOW THE ASSESSEE IS IN APPEAL. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND FURTHER SUBMITTED THAT NOW THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE JUDGMENT OF THE HON BLE APEX COURT IN THE CASE OF OIL AND NATURAL GAS CORPORATION LTD. VS CIT & ANR. (2015) 376 ITR 306. IT WAS FURTHER SUBMITTED THAT THE LD. DRP IN THE SUBSEQUENT YEAR I.E. ASSESSMENT YEAR 2012 - 13 HAD DIRECTED THE AO TO ASSESS THE INCOME OF SIMILAR NATURE U/S 44BB OF THE ACT AND ALLOWED THE OBJECTION OF THE ASSESSEE. COPY OF THE SAID ORDER DATED 12.10.2015 OF THE LD. DRP, NEW DELHI WAS FURNISHED W HICH IS PLACED ON RECORD. 11 . IN HIS RIVAL SUBMISSIONS THE LD. DR SUPPORTED THE ORDER OF THE AO. 12 . WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON THE RECORD. IN THE PRESENT CASE, IT IS AN ADMITTED FACT THAT FOR THE SUCCEEDING YE AR I.E. ASSESSMENT YEAR 2012 - 13, A SIMILAR VIEW WAS TAKEN BY THE AO ON THE IDENTICAL TRANSACTION AND THE ASSESSEE FILED OBJECTION S BEFORE THE LD. DRP, NEW DELHI WHO DIRECTED THE AO TO ASSESS THE INCOME UNDER THE 9 ITA NO. 5009/DEL/2012 ITA NO. 6336 /DEL/201 3 GLOBAL OFFSHORE INTERNATIONAL LTD. PROV ISIONS OF SECTION 44BB AND NOT SECTION 44D OF THE ACT. THE RELEVANT FINDINGS HAVE BEEN GIVEN IN PARAS 7.0 TO 7.2 OF THE ORDER DATED 12.10.2015 WHICH READ AS UNDER: 7.0 DRP HAS DULY EXAMINED THE ISSUE INVOLVED. THE ASSESSEE HAS EARNED REVENUE FROM LETTING 'OF SHIP/VESSEL TO SCI FOR THE PURPOSES OF VARIOUS UNDER WATER OPERATIONS LIKE INSTALLATION AND MAINTENANCE OF PIPELINES, RISERS, SBMS, PLATFORMS ETC. SCI HAS ENTERED INTO CONTRACT WITH ONGC AND ONGC HAS ENTERED INTO PRODUCTION SHARING CONTRACT WITH GOVT. OF INDIA. THE ISSUE INVOLVED IS WHETHER LETTING OF SHIP/VESSEL AMOUNTS TO FACILITY PROVIDED 'IN CONNECTION WITH' THE ACTIVITY OF PROSPECTING ETC OF MINERAL OILS. THE CONTROVERSY HAS BEEN SETTLED BY RECENT DECISION OF HON'BLE SU PREME COURT IN CASE OF ONGC V CI T WHEREIN IT HAS BEEN HELD THAT WHERE THE PITH AND SUBSTANCE OF THE CONTRACT/AGREEMENT IS INEXTRICABLY CONNECTED WITH PROSPECTING, EXTRACTION OR PRODUCTION OF MINERAL OIL, THE PAYMENTS RECEIVED BY THE NON - RESIDENT ASSESSE E S OR FOREIGN COMPANIES UNDER TH E SAID CONTRACTS IS MORE APPROPRIATELY ASSESSABLE UNDER THE PROVISIONS OF S ECTION 44BB AND NOT SECTION 44D OF THE ACT. 7.2 IN PRESENT CASE, LETTING OF SHIP/VESSEL BY THE ASSESSEE TO SCI IS FOR THE PURPOSES OF VARIOUS ACTIVITIES / OPERATIONS WHICH ARE IN C ONNECTION WITH PROSPECTING ETC. OF MINERAL OILS BY ONGC. HENCE, CONSIDERATION RECEIVED BY THE ASSESSEE SHALL BE TAXABLE AS PER PROVISIONS OF SECTION 44BB OF THE ACT. THE AO IS DIRECTED TO GRANT THE RELIEF ACCORDINGLY. THIS PANEL HAS TAKEN A VIEW DIFFERENT FROM THAT TAKEN BY EARLIER PANELS IN PRECEDING YEARS AS BENEFIT OF RECENT HON'BLE SUPREME COURT DECISION WAS NOT AVAILABLE AT THAT POINT OF TIME. OTHER GROUNDS TAKEN BY THE ASSESSEE REGARDING NATURE OF THE PAYMENT AS FTS AND ATTRIBUTION OF INCOME HAVE BECO ME INFRUCTUOUS AND HENCE NOT BEING ADJUDICATED. THE OBJECTION IS ACCORDINGLY ALLOWED. 10 ITA NO. 5009/DEL/2012 ITA NO. 6336 /DEL/201 3 GLOBAL OFFSHORE INTERNATIONAL LTD. 1 3 . FROM THE AFORESAID OBSERVATION OF THE LD. DRP, IT IS CRYSTAL CLEAR THAT IN THE EARLIER YEAR I.E. ASSESSMENT YEAR 2012 - 13, THE LD. DRP HAD TAKEN A DIFFERENT VIEW. HOWEVER, THE ISSUE NOW HAS BEEN SETTLED BY THE HON BLE APEX COURT IN THE CASE OF OIL AND NATURAL GAS CORPORATION LTD. VS CIT & ANR. (2015) 376 ITR 306 WHEREIN IT HAS BEEN HELD AS UNDER: TH A T THE BRIEF DESCRIPTION OF THE WORKS COVERED UNDER EACH OF THE CONTRACTS IN QUESTION WOULD INDICATE THAT THE PITH AND SUBSTANCE OF EACH OF THE CONTRACTS WAS INEXTRICABLY CONNECTED WITH PROSPECTING, EXTRACTION O R PRODUCTION OF MINERAL OIL. TH E DOMINANT PURP OSE OF EACH OF SUCH AGREEMENTS WAS FOR PROSPECTING, EXTRACTION OR PRODUCTION OF MINERAL OILS THOUGH THERE MAY BE CERTAIN ANCILLARY WORKS CONTEMPLATED THERE - UNDER. IF THAT BE SO, THE PAYMENTS MADE BY THE ONGC AND RECEIVED BY THE NON - RESIDENT OR FOREIGN COM PANIES UNDER THE CONTRACTS FOR PROVIDING VARIOUS SERVICES IN CONNECTION WITH PROSPECTING, EXTRACTION OR PRODUCTION OF MINERAL OILS WERE NOT CHARGEABLE TO TAX AS 'FEES FOR TECHNICAL SERVICES' UNDER SECTION 44D READ WITH EXPLANATION 2 TO SECTION 9(1 )(VII) OF THE ACT BUT MORE APPRO PRIATELY ASSESSABLE ON A PRESUMPTIVE BASIS UNDER SECTION 44BB OF THE ACT. 14 . FROM THE ABOVE DISCUSSION, IT IS CLEAR THAT NOW THE PRESENT CONTROVERSY HAS BEEN SETTLED BY THE HON BLE SUPREME COURT. WE, THEREFORE, BY FOLLOWING THE R ATIO LAID DOWN BY THE HON BLE APEX COURT IN THE AFORESAID ORDER IN THE CASE OF OIL AND NATURAL GAS CORPORATION LTD. VS CIT & ANR. (2015) 376 ITR 306 SET ASIDE THE IMPUGNED ORDER PASSED BY THE AO AND DIRECT HIM TO COMPUTE THE INCOME OF THE ASSESSEE AS CLAIM ED U/S 44BB OF THE ACT. 11 ITA NO. 5009/DEL/2012 ITA NO. 6336 /DEL/201 3 GLOBAL OFFSHORE INTERNATIONAL LTD. 15 . IN ITA NO. 6336/DEL/2013 FOR THE ASSESSMENT YEAR 2010 - 11, THE FACTS ARE IDENTICAL AS WERE INVOLVED IN ITA NO. 5009/DEL/2012 FOR THE ASSESSMENT YEAR 2009 - 10, WHICH HAS BEEN ADJUDICATED IN FORMER PART OF THIS ORDER. THEREFORE, OUR FINDINGS GIVEN FOR THE ASSESSMENT YEAR 2009 - 10 SHALL APPLY MUTATIS MUTANDIS FOR THE ASSESSMENT YEAR 2010 - 11. 16 . IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE ALLOWED . (ORD ER PRONOUNCED IN THE COURT ON 1 6 /08/2017) S D / - S D / - (KULDIP SINGH) (N. K. SAINI) JUDICIAL ME MBER ACCOUNTANT MEMBER DATED: 1 6 /08/2017 *SUBODH* COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(APPEALS) 5 . DR: ITAT ASSISTANT REGISTRAR