Appeal details
Counselvise Citation
[2019] 118 COUNSELVISE.COM (IT) 4394 (ITAT-DELHI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
4 year(s) 3 month(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
11-02-2019
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
E
Assessment Year
2010-2011
Appeal Filed On
11-11-2014
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E, NEW DELHI BEFORE SMT. DIVA SINGH, JUDICIAL MEMBER AND SH. R.K PANDA, ACCOUNTANT MEMBER ITA NO.6169/DEL/2014 ASSESSMENT YEAR: 2010-11 DDIT INTERNATIONAL TAXATION AAYAKAR BHAWAN, 13A- SUBHASH ROAD, DEHRADUN 248001 VS ONGC AS REPRESENTATIVE ASSESSEE OF M/S. CAMERON SINGAPORE PTE. LTD. CO., TEL BHAWAN, DEHRADUN (APPELLANT) (RESPONDENT) APPELLANT BY SH. RINKU SINGH, SR. DR RESPONDENT BY SH. GAURAV JAIN, ADVOCATE MS. MANISHA SHARMA, ADVOCATE DATE OF HEARING: 03 /0 1 /201 9 DATE OF PRONOUNCEMENT: /01/2019 ORDER PER R.K. PANDA, AM: 1. THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGA INST THE ORDER DATED 28.08.2014 OF THE CIT(A)-II, DEHRADUN RELATING TO A . Y. 2010-11. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE FILED ITS RETURN OF INCOME ON 13.09.2010 DECLARING TOTAL INCOME OF RS.4 0,72,220/-IN ITS CAPACITY AS REPRESENTATIVES ASSESSEE OF M/S. CAMERO N SINGAPORE PTE. LTD. THE ASSESSING OFFICER, DURING THE COURSE OF ASSESSM ENT PROCEEDINGS, OBSERVED THAT DURING THE RELEVANT PREVIOUS YEAR, ON GC HAD MADE PAYMENTS OF RS.3,90,72,159/- TO M/S. CAMERON SINGAP ORE PTE. LTD. AGAINST TAX PROTECTED CONTRACT NO. CW/BDA/MM/CAMERON/SERVICE /WORKSHOP, ONGC, BARODA. THE SCOPE OF WORK OF AFORESAID CONTRA CT INCLUDED IDENTIFICATION OF MACHINES, COMMISSIONING TOOLS AND MATERIALS REQUIRED FOR 2 ESTABLISHMENT SET UP FOR REPAIR OF BLOW OUT PREVENT ERS (BOPS) AT CENTRAL WORK SHOP, ONGC, BARODA. THE SCOPE OF THE AFORESAI D WORK INCLUDES IDENTIFICATION OF MACHINES, EQUIPMENTS, TOOLS AND M ACHINES REQUIRED FOR INSTALLATION, TESTING AND COMMISSIONING OF ALL MACH INES/EQUIPMENT REQUIRED FOR REPAIR OF BOPS, IDENTIFICATION AND DEV ELOPMENT OF VENDORS BASE FOR PERFORMING BOP REPAIRS ETC. AND THE ASSESSEE HA S NOT OFFERED ANY REVENUES TO TAX IN INDIA IN THE RETURN FILED. 3. THE ASSESSING OFFICER, THEREFORE, ISSUED A SHOW CAUSE NOTICE ASKING THE ASSESSEE TO EXPLAIN AS TO WHY THE REVENUES RECE IVED BY IT SHOULD NOT BE TREATED AS FEES FOR TECHNICAL SERVICES LOOKING A T THE NATURE OF ACTIVITY PERFORMED UNDER THE CONTRACT. THE ASSESSEE FILED I TS WRITTEN SUBMISSION EXPLAINING THAT AS PER THE DEFINITION OF FEES FOR TECHNICAL SERVICES U/S 9 (I) (VII) AND EXPLANATION THERETO WHILE CONSIDERAT ION FOR RENDERING OF ANY MANAGERIAL, TECHNICAL OR CONSULTANCY SERVICES I S TAXABLE AS FEES FOR TECHNICAL SERVICES', CONSIDERATION FOR ANY CONSTRUC TION, ASSEMBLY, MINING OR LIKE PROJECT, IS NOT TAXABLE AS FEES FOR TECHNICAL SERVICES. THE CBDT INSTRUCTION NO. 1862 DATED 22.10.1990 OF CBDT WAS BROUGHT TO THE NOTICE OF THE ASSESSING OFFICER AND IT WAS ARGU ED THAT SERVICES LIKE TRAINING AND CARRYING OUT DRILLING OPERATION SHALL BE EXCLUDED FROM FTS. 4. HOWEVER, THE ASSESSING OFFICER HELD THAT THE CON TENTION OF THE ASSESSEE IS NOT ACCEPTABLE. ASSESSEE NRC IS NOT CAR RYING OUT DRILLING/MINING ACTIVITIES AND THE SAME IS DONE BY ONGC ONLY. THUS INSTRUCTION NO. 1862 IS NOT APPLICABLE NOR ASSESSEE GETS RELIEF BY THE DEFINITION OF EXPLANATION TO SEC. 9(1)(VII) OF L.T. ACT. FOR THE ABOVE PROPOSITION THE ASSESSING OFFICER RELIED ON THE DEC ISION OF ITAT DELHI IN THE CASE OF CGG VERITAS SERVICES SA REPORTED IN 50 SOT 335. THE ASSESSEES SUBMISSION REGARDING NON APPLICABILITY O F THIS ITAT ORDER WAS ALSO REJECTED. 3 5. THE ASSESSING OFFICER REJECTING THE EXPLANATION GIVEN BY THE ASSESSEE AND DISTINGUISHING THE DECISIONS CITED BEFORE HIM P ASSED DRAFT ASSESSMENT ORDER DETERMINING THE TAXABLE INCOME AT RS.1,69,08, 500/-. THE ASSESSEE DID NOT FILE ANY OBJECTION BEFORE THE DRP. THE ASSE SSING OFFICER, THEREFORE, IN THE FINAL ORDER PASSED U/S 143 (3)/ 144C(3) DATE D 15.04.2013 DETERMINED THE TOTAL INCOME OF RS.1,69,08.500/-. 6. IN APPEAL THE LD. CIT(A) FOLLOWING HIS ORDER FOR PRECEDING ASSESSMENT ORDER I.E. A. Y. 2009-10 DIRECTED THE ASSESSING OF FICER TO COMPUTE TAXABLE INCOME ON THE BASIS OF SECTION 44BB OF THE IT ACT. 7. AGGRIEVED WITH SUCH ORDER OF THE CIT(A), THE REV ENUE IS IN APPEAL BEFORE THE TRIBUNAL BY RAISING FOLLOWING GROUNDS OF APPEAL :- 1 WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD CIT(A) HAS ERRED IN HOLDING THAT THE SCOPE OF WORK EXECUTED BY THE ASSESSEE UNDER CONTRACTS WITH ONGC FOR ESTABLISHMEN T OF SET-UP FOR REPAIR OF BLOW OUT PREVENTORS (BOPS) AT BARODA ('SE RVICES') WAS NOT IN THE NATURE OF FEE FOR TECHNICAL SERVICES ('FTS') SQ UARELY COVERED U/S 9(L)(VII) OF THE IT ACT, 1961 ('THE ACT') 1.1 THE LD CIT(A) FAILED TO APPRECIATE THAT THE SCOPE O F THE WORK UNDER THE CONTRACT INCLUDED, INTER ALIA, NOT ONLY ESTABLI SHING/ MANAGING/ SUPERVISING A SUPPLY CHAIN FOR BOPS, AND IDENTIFICA TION & DEVELOPMENT OF VENDOR BASE FOR PERFORMING BOPS, BUT ALSO IMPART ING TRAINING TO ONGC PERSONNEL FOR ASSEMBLY, TESTING, INSTALLATION/ COMMISSIONING, REPAIRS OF BOPS AND THEREFORE THE PAYMENTS QUALIFIE D AS FEE FOR TECHNICAL SERVICES UNDER THE ACT READ WITH THE DTAA WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD CIT (A) HAS ERRED IN HOLDING THAT THE INCOME OF THE ASS ESSEE WAS TAXABLE UNDER THE PRESUMPTIVE PROVISIONS OF SEC 44BB AND IG NORING THE FACT THAT TAXABILITY U/S 44BB SHALL NOT APPLY IN RESPECT OF INCOME REFERRED TO IN SECTION 44DA IN VIEW OF THE CLARIFIACTORY PRO VISO TO SEC. 44BB AND SEC 44DA OF THE ACT. 3. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD CIT(A) HAS ERRED IN HIS INTERPRETATION OF THE LE GISLATIVE INTENT BEHIND THE SCHEME OF TAXATION ENVISAGED IN SECTIONS 9(L)(V II) & 9(L)(VI) READ WITH SECTIONS 44DA AND 44BB OF THE ACT, IGNORING THE DEC ISION IN THE CASE OF 4 CIT M/S ONGC AS AGENT OF M/S FORAMER FRANCE [(2008) 299 ITR 438 UTTARAKHAND] 4. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, 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.4653/DEL/201 0 (ON THE ISSUE THAT ONCE A PE IS ESTABLISHED TO BE IN PLACE THEN THE INCOME HAS TO BE TREATED AS BUSINESS PROFITS AND ASSESSABLE U/ S 44BB) 5. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE CIT (A) HAS ERRED IN NOT APPRECIATING THE FACT THAT PROVISO TO SECTION 44DA BROUGHT ABOUT BY THE FINANCE ACT 2010 WAS ONLY CLAR IFICATORY IN NATURE AND ITS APPLICATION HAS TO BE READ INTO THE MAIN PR OVISIONS WITH EFFECT FROM THE TIME THE MAIN PROVISION CAME INTO EFFECT I N VIEW OF THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE O F SEDCO FOREX INTERNATIONAL DRILLING V/S CIT 6. WHETHER ON THE FACTS AND CIRCUMSTANCES ON THE FACTS , THE LDCIT(A) HAS ERRED IN REVERSING THE ACTION OF THE A O WHO, HAVING HELD THAT THE ASSESSEE'S REVENUES ON ACCOUNT OF SERVICES UNDER THE CONTRACTS ARE LIABLE TO BE TAXED U/S 44DA , RIGHTLY ESTIMATED THE INCOME OF THE ASSESSEE BY APPLYING 25% RATE OF PROF IT ON GROSS RECEIPTS IN THE ABSENCE OF BOOKS OF ACCOUNTS AND DETAILS OF EXPENSES INCURRED IN PROVIDING THE SERVICES. 7) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW , THE LD CIT(APPEALS) HAS ERRED IN HOLDING THAT THE ASSESSEE IS NOT LIABLE TO PAY INTEREST U/S 234B OF THE ACT AND IN OBSERVIN G THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY DECISION IN TH E CASE OF M/S MAERSK [334 ITR 79, UTTARAKHAND] 7.1 THE LD CIT(APPEALS) HAS ERRED IN NOT APPRECIATING T HE FACT THAT THE CASE OF M/S MAERSK WAS DISTINGUISHABLE ON FACTS WHEREIN THE EMPLOYER FAILED TO DEDUCT TAX AT SOURCE DESPITE THE SPECIFIC MANDATORY PROVISIONS OF THE ACT STIPULATING THE EMPLOYER BEIN G LIABLE TO DEDUCT TAX ON THE SALARY PAID TO THE EMPLOYEE, THEREBY HOLDING THAT AN EMPLOYEE IS NOT LIABLE TO PAY ADVANCE TAX ON SALARY. THE ITAT H AS ERRED IN RELYING UPON THIS DECISION AS THE CASE DOES NOT LAY DOWN A GENERAL PROPOSITION OF LAW THAT INTEREST U/S 234B IS NOT CHARGEABLE IN ALL CASES, PARTICULARLY IN CASES WHERE THE NON-RESIDENT ASSESSEE/PAYEE/DEDUCTE E HAS PLAYED A ROLE IN INDUCING NON-DEDUCTION OR SHORT-DEDUCTION O N THE PART OF THE PAYER/DEDUCTOR. 7.2 THE LD CIT(APPEALS) HAS ERRED IN FAILING TO TAKE NO TE OF THE OBSERVATIONS OF THE HON'BLE HIGH COURT IN THE CASE OF M/S MITSUBISHI [330 ITR 578, DEL]THAT THE ROLE OF THE ASSESSE/PAYEE/DED UCTEE IN SHORT- 5 DEDUCTION OR NON-DEDUCTION OF TAX NEEDS TO BE ASCER TAINED BEFORE CLAIM REGARDING NON-LIABILITY TO INTEREST U/S 234B OF THE ACT IS ACCEPTED, A PROPOSITION AFFIRMED SUBSEQUENTLY IN THE CASE OF M/ S ALCATEL LUCENT (JUDGEMENT OF DELHI HIGH COURT DATED 7.11.2013 IN I TA NO. 327 &ORS OF 2012) 8. THE LD. COUNSEL FOR THE ASSESSEE, AT THE OUTSET, SUBMITTED THAT IDENTICAL ISSUE HAD COME UP BEFORE THE TRIBUNAL IN ASSESSEES OWN CASE IN THE IMMEDIATELY PRECEDING ASSESSMENT YEAR. THE TRI BUNAL VIDE ITA NO.176/DEL/2013 ORDER DATED 24.05.2016 HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE AND DISMISSED THE APPEAL FILED BY T HE REVENUE. SINCE THE FACTS OF THE INSTANT CASE ARE IDENTICAL TO THE FACT S OF THE CASE DECIDED BY THE TRIBUNAL, THEREFORE, THE ORDER OF THE CIT(A) HAS TO BE UPHELD AND THE GROUNDS RAISED BY THE REVENUE SHOULD BE DISMISSED. 9. THE LD. DR ON THE OTHER HAND FAIRLY CONCEDED THA T THE ISSUE HAS BEEN DECIDED IN FAVOUR OF THE REVENUE BY THE DECISION OF THE TRIBUNAL. 10. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW. WE FI ND THE ASSESSING OFFICER IN THE INSTANT CASE HAS BROUGHT TO TAX THE GROSS REC EIPT OF THE NRC AS FTS AS PER SECTION 44 DA OF THE ACT. WE FIND IDENTICAL ISSUE HAD COME UP BEFORE THE TRIBUNAL AND THE TRIBUNAL IN THE PRECEDI NG ASSESSMENT YEAR VIDE ITA NO.176/DEL/2013 ORDER DATED 24.05.2016 HAS DISM ISSED THE APPEAL FILED BY THE REVENUE BY OBSERVING AS UNDER :- 5. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVE S OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS RELIED UPON AND ORDERS P ASSED BY THE REVENUE AUTHORITIES BELOW IN THE LIGHT OF THE FACTS AND CIRCUMSTANCES O F THE CASE. 6. GROUNDS NO.L TO 8 RAISED BY THE REVENUE IN THIS CAS E LEAD TO THE SOLE QUESTION TO BE DETERMINED BY THE TRIBUNAL IS, AS TO WHETHER RE VENUE OF RS.2,04,83,587/- EARNED BY THE ASSESSEE/ FOREIGN COMPANY FROM SUPPLY CHAIN FOR 10 BLOW OUT PREVENTS, TRAIN ONGC 6 SHOP LABOUR, CLEANING OF EQUIPMENT, ONGC SHOP LABOU R 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 SERVICES)? 7. LD. DR FOR THE REVENUE CHALLENGING THE IMPUGNED OR DER RELIED UPON THE ORDER PASSED BY THE AO. HOWEVER, ON THE OTHER HAND, THE L D. AR FOR THE ASSESSEE BY RELYING UPON THE 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 COVERED. 8. UNDISPUTEDLY, THE NON-RESIDENT ASSESSEE/FOREIGN CO MPANY WAS ENGAGED BY OIL & NATURAL GAS CORPORATION LTD. VIDE CONTRACT DATED 20.12.2007 TO DEPLOY EXPERT TO HELP ESTABLISH THE SUPPLY CHAIN FOR 10 BLOW OUT PREVENTE RS (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 IMPA RT TRAINING TO ONGC SHOP LABOUR ON PAINT, ASSEMBLY 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. 9. ASSESSEE COMPANY CATEGORICALLY CLAIMED THAT THE WO RK CARRIED OUT BY THE NON- RESIDENT IS IN CONNECTION WITH THE EXPLORATION, EXT RACTION AND PRODUCTION OF MINERAL OILS AND GAS AND AS SUCH, IS TO BE TAXABLE UNDER THE PRE SUMPTIVE PROVISIONS CONTAINED U/S 44BB OF THE ACT AND NOT AS FEES FOR TECHNICAL SERVI CES. HOWEVER, AO CONSIDERED THE PAYMENT TO CARRY OUT THE AFORESAID WORK BY A NON-RE SIDENT COMPANY AS FEE FOR TECHNICAL SERVICES AND INVOKED THE PROVISIONS OF SECTION 9(L) (VII) OF THE ACT AND CHARGED THE SAME TO TAX UNDER AMENDED PROVISO TO SECTION 44BB AND U/S 4 4D OF THE ACT. 7 10. HONBLE APEX COURT IN THE JUDGMENT IN OIL & NATURA L GAS CORPORATION LTD. (SUPRA) DECIDED THE IDENTICAL ISSUE IN ASSESSEES O WN CASE IN FAVOUR OF THE ASSESSEE AND OPERATIVE PART THEREOF IS REPRODUCED AS UNDER FOR R EADY REFERENCE :- 13. THE INCOME TAX ACT DOES NOT DEFINE THE EXPRESS ION MINES OR MINERALS. THE SAID EXPRESSIONS ARE FOUND DEFINED AND EXPLAINE D IN THE MINES ACT, 1952 AND THE OIL FIELDS (DEVELOPMENT AND REGULATION) ACT, 19 48. WHILE CONSTRUING THE SOMEWHAT PARI MATERIAL EXPRESSIONS APPEARING IN THE MINES AND MINERALS (DEVELOPMENT AND REGULATION) ACT 1957 REGARD MUST B E HAD TO THE PROVISIONS OF ENTRIES 53 AND 54 OF LIST I AND ENTRY 22 OF LIST LL OFTHE 7 TH ' SCHEDULE TO THE CONSTITUTION TO UNDERSTAND THE EXCLUSION OF MINERA L OILS FROM THE DEFINITION OF MINERALS IN SECTION 3(A) OF THE 1957 ACT. REGARD MU ST ALSO BE HAD TO THE FACT THAT MINERAL OILS IS SEPARATELY DEFINED IN SECTION 3(B) OF THE 1957 ACT TO INCLUDE NATURAL GAS AND PETROLEUM IN RESPECT OF WHICH PARLIAMENT HA S EXCLUSIVE JURISDICTION UNDER ENTRY 53 OF LIST I OF THE 7TH SCHEDULE AND HAD ENAC TED AN EARLIER LEGISLATION I.E. OIL FIELDS (REGULATION AND DEVELOPMENT) ACT, 1948. READ ING SECTION 2(J) AND 2(JJ) OF THE MINES ACT, 1952 WHICH DEFINE MINES AND MINERALS AND THE PROVISIONS OF THE OIL FIELDS (REGULATION AND DEVELOPMENT) ACT, 1948 SPECI FICALLY RELATING TO PROSPECTING AND EXPLORATION OF MINERAL OILS, EXHAUSTIVELY REFER RED TO EARLIER, IT IS ABUNDANTLY CLEAR THAT DRILLING OPERATIONS FOR THE PURPOSE OF P RODUCTION OF PETROLEUM WOULD CLEARLY AMOUNT TO A MINING ACTIVITY OR A MINING OPE RATION. VIEWED THUS, IT IS THE PROXIMITY OF THE WORKS CONTEMPLATED UNDER AN AGREEM ENT, EXECUTED WITH A NON- 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 AS SESSEE OR THE FOREIGN COMPANY IS TO BE ASSESSED UNDER SECTION 44BB OR SECTION 44D OF THE ACT. THE TEST OF PITH AND SUBSTANCE OF THE AGREEMENT COMMENDS TO US AS RE ASONABLE FOR ACCEPTANCE. EQUALLY IMPORTANT IS THE FACT THAT THE CBDT HAD ACC EPTED 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 PROJ ECTS' 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 E XPLORATION OF AND EXTRACTION OF OIL AND NATURAL GAS AND HENCE PAYMENTS MADE UNDER SUCH AGREEMENT TO A NON- RESIDENT/FOREIGN COMPANY WOULD BE CHARGEABLE TO, TA X UNDER THE PROVISIONS OF SECTION 44BB AND NOT SECTION 44D OF THE ACT. WE DO NOT SEE HOW ANY OTHER VIEW CAN BE TAKEN IF THE WORKS OR SERVICES MENTIONED UND ER A PARTICULAR AGREEMENT IS DIRECTLY ASSOCIATED OR INEXTRICABLY CONNECTED WITH PROSPECTING, EXTRACTION OR 8 PRODUCTION OF MINERAL OIL. KEEPING IN MIND THE ABOV E PROVISION, WE HAVE LOOKED INTO EACH OF THE CONTRACTS INVOLVED IN THE PRESENT GROUP OF CASES AND FIND THAT THE BRIEF DESCRIPTION OF THE WORKS COVERED UNDER EACH O F THE SAID CONTRACTS AS CULLED OUT BY THE APPELLANTS AND PLACED BEFORE THE COURT IS CO RRECT. THE SAID DETAILS ARE SET OUT BELOW. S.NO. CIVIL APPEAL NO. WORK COVERED UNDER THE CONTRACT 1. 4321 DRILLING OF EXPLORATION WELLS AND CARRYING OUT SEIS MIC SURVEYS FOR EXPLORATORY DRILLING. 2. 740 DRILLING, FURNISHING PERSONNEL FOR MANNING, MAINTEN ANCE AND OPERATION OF DRILLING RIG AND TRAINING OF PERSONNEL . 3. 731 DRILLING, FURNISHING PERSONNEL FOR MANNING, MAINTEN ANCE AND OPERATION OF DRILLING RIG AND TRAINING OF PERSONNEL . 4. 1722 FURNISHING SUPERVISORY STAFF WITH EXPERTISE IN OPER ATION 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, PROCEDURE F OR EXECUTION AND DETAILS REGARDING MONITORING. 8. 1532 STUDY FOR SELECTION OF ENHANCED OIL RECOVERY PROCES SES AND CONCEPTUAL DESIGN OF PILOT TESTS. 9. 1520 ENGINEERING AND TECHNICAL SUPPORT TO ONGC IMPLEMENT ATION OF CYCLIC STEAM STIMULATION IN HEAVY OIL WELLS. 9 10. 2794 ASSESSMENT AND PROCESSING OF SEISMIC DATA ALONG WIT H ENGINEERING AND TECHNICAL SUPPORT IN IMPLEMENTATION OF CYCLIC S TEAM STIMULATION. 11. 1524 CONDUCTING RESERVOIR STIMULATION STUDIES IN ASSOCIA TION WITH PERSONNEL OF ONGC. 12. 1535 LABORATORY TESTING UNDER SIMULATED RESERVOIR CONDIT IONS. 13. 1514 CONSULTANCY FOR OPTIMAL EXPLOITATION OF HYDROCARBON RESOURCES. 14. 2797 CONSULTANCY FOR ALL ASPECTS OF COAL BED METHANE 15. 6174 ANALYSIS OF DATA OF WELLS TO PREPARE A JOB DESIGN. 16. 1517 GEOLOGICAL STUDY OF THE AREA AND ANALYSIS OF SEISMI C INFORMATION REPORTS TO DESIGN 2 DIMENSIONAL SEISMIC SURVEYS. 17. 7226 OPINION ON HYDROCARBON RESOURCES AND FORESEEABLE PO TENTIAL. 18. 7227 OPINION ON HYDROCARBON RESOURCES AND FORESEEABLE PO TENTIAL. 19. 7230 OPINION ON HYDROCARBON RESOURCES AND FORESEEABLE PO TENTIAL. 20. 6016 OPINION ON HYDROCARBON RESOURCES AND FORESEEABLE PO TENTIAL. 21. 6008 EVALUATION OF ULTIMATE RESOURCE POTENTIAL AND PRESE NTATIONS OUTSIDE INDIA IN CONNECTION WITH PROMOTIONAL ACTIVITIES FOR JOINT VENTURE EXPLORATION PROGRAM. 22. 1531 REVIEW OF SUB-SURFACE WELL DATA, PROVIDE REPAIR PLA N OF WELLS AND SUPERVISE REPAIRS. 10 23. 733 REPAIR OF GAS TURBINE, GAS CONTROL SYSTEM AND INSPE CTION OF GAS TURBINE AND GENERATOR 24. 741 REPAIR AND INSPECTION OF TURBINES. 25. 737 REPAIR, INSPECTION AND OVERHAULING OF TURBINES. 26. 736 INSPECTION, ENGINE PERFORMANCE EVALUATION, INSTRUME NT 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 DEPUTING ENGINEER TO ATTEND TO ANY PROBLEM ARISING IN THE MACHINES. 32. 1529 INSPECTION OF DRILLING RIG AND VERIFICATION OF RELI ABILITY OF CONTROL SYSTEMS IN THE DRILLING RIG. 33. 2008 EXPERT ADVICE ON THE DEVICE TO CLEAN INSIDES OF A P IPELINE. 34. 2795 FEASIBILITY STUDY OF RIG TO ASSESS ITS REMAINING US EFUL LIFE AND TO CARRY OUT STRUCTURAL ALTERATIONS. 35. 925 ENGINEERING ANALYSIS OF RIG. 36. 1519 IMPARTING TRAINING ON CASED HOLD PRODUCTION LOG EVA LUATION AND 11 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 ASSISTANCE IN DEVELOPMENT AND AUDIT OF SAFETY MANAGEMENT SYSTEM. 42. 1239 TO DEVELOP TECHNICAL SPECIFICATION FOR 3D SEISMIC A PI MODULES OF WORK AND TO PREPARE BID PACKAGES. 43. 1527 SUPPLY SUPERVISION AND INSTALLATION OF SOFTWARE WHI CH IS USED FOR ANALYSIS OF FLOW RATE OF MINERAL OIL TO DETERMINE R ESERVOIR CONDITIONS. THE ABOVE FACTS WOULD INDICATE THAT THE PITH AND SU BSTANCE OF EACH OF THE CONTRACTS/AGREEMENTS IS INEXTRICABLY CONNECTED WITH PROSPECTING, EXTRACTION OR PRODUCTION OF MINERAL OIL. THE DOMINANT PURPOSE OF EACH OF SUCH AGREEMENT IS FOR PROSPECTING, EXTRACTION OR PRODUCTION OF MINERAL OI LS THOUGH THERE MAY BE CERTAIN ANCILLARY WORKS CONTEMPLATED THEREUNDER. IF THAT BE SO, WE WILL HAVE NO HESITATION IN HOLDING THAT THE PAYMENTS MADE BY ONGC AND RECEI VED BY THE NON-RESIDENT ASSESSEES OR FOREIGN COMPANIES UNDER THE SAID CONTR ACTS IS ASSESSABLE UNDER THE PROVISIONS OF SECTION 44BB AND NOT COMPANIES UNDER THE SAID CONTRACTS IS MORE APPROPRIATELY ASSESSABLE UNDER THE PROVISIONS OF SE CTION 44BB AND NOT SECTION 44D OF THE ACT. ON THE BASIS OF THE SAID CONCLUSION REA CHED BY US, WE ALLOW THE APPEALS UNDER CONSIDERATION BY SETTING ASIDE THE ORDERS OF THE HIGH COURT PASSED IN EACH OF THE CASES BEFORE IT AND RESTORING THE VIEW TAKEN BY THE LEARNED APPELLATE COMMISSIONER AS AFFIRMED BY THE LEARNED TRIBUNAL. 11. AO PROCEEDED TO TREAT THE REVENUE RECEIPT UNDER CON SIDERATION AS FTS BY APPLYING THE AMENDMENT TO SECTION 44BB AND 44DA RET ROSPECTIVELY WHEREAS IT CAME INTO FORCE W.E.F. 1.4.2011, APPLICABLE TO AY 2 011-12. HOWEVER, HONBLE 12 SUPREME COURT IN THE JUDGMENT IN OIL & NATURAL GAS CORPORATION LTD. (SUPRA) SET THE CONTROVERSY AT REST BY HOLDING THAT THE SERVICE S RENDERED BY THE NON-RESIDENT COMPANY TO THE OIL & NATURAL GAS CORPORATION LTD. A S REFERRED IN PARA 8 OF THIS ORDER VIDE CONTRACT DATED 20.12.2007, VIZ., TO DEPL OY 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 MACHI NIST AT VENDORS FOR ROUGH OUT AND FINISH MACHINE, TRAIN ONGC WELDERS AND IMPART T RAINING TO ONG C SHOP LABOUR ON PAINT, ASSEMBLY AND TESTING OF EQUIPMENT. BOPS ARE ESSENTIAL EQUIPMENT FOR SAFE PRODUCTION OF MINERAL OIL AS THEY HELP CON TROL FORMATION PRESSURE TO PREVENT ANY BLOW-OUTS, SQUARELY FALL IN THE CATEGORY OF THE WORK 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 TH E HONBLE SUPREME COURT AND AS SUCH, WE ARE OF THE CONSIDERED VIEW THAT THE SER VICES RENDERED BY THE NON- RESIDENT COMPANY FALL WITHIN THE PURVIEW OF PRESUMP TIVE PROVISIONS OF SECTION 44BB OF THE ACT. SO, THERE IS NO GROUND TO INTERFER E INTO THE FINDINGS RETURNED BY THE ID. CIT (A), HENCE GROUNDS NO.L TO 8 ARE DETERM INED AGAINST THE REVENUE. 11. SINCE THE LD. CIT(A) WHILE ALLOWING THE APPEAL FILED BY THE ASSESSEE HAS FOLLOWED HIS ORDER FOR THE PRECEDING ASSESSMENT YEAR AND SINCE THE ORDER OF THE CIT(A) FOR THE PRECEDING ASSESSMENT YE AR HAS BEEN UPHELD BY THE TRIBUNAL AND THE APPEAL FILED BY THE REVENUE HA S BEEN DISMISSED, THEREFORE, IN ABSENCE OF ANY CONTRARY MATERIAL BROU GHT TO OUR NOTICE, THE ORDER OF THE CIT(A) IS UPHELD AND THE GROUNDS RAISE D BY THE REVENUE ARE DISMISSED. 12. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. SD/- SD/- (DIVA SINGH) (R.K PANDA) JUDICIAL MEMBER ACC OUNTANT MEMBER *NEHA* DATE:-11.02.2019 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI 13 DATE OF DICTATION 03.01.2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/ PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT 11.02.2019 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH FILE GOES TO THE HEAD CLERK. THE DATE ON WHICH FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER
