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2018 (3) TMI 1599 - AT - Income TaxAssessment of appellant on a protective basis - AOP - Liability for Claims among the Members - taxabilty of consortium members - reference to Dispute Resolution Panel (DRP) - whether the consortium members constitutes an AOP and its taxability u/s 44BB? - Held that:- Consortium Agreement dated 04/05/03 is the basis on which the entire scope of work has been executed by consortium members. The entire relationship between the consortium members are governed by Consortium Agreement dated 04/05/03, whereas MoU dated 28/05/03 has been executed by consortium members solely for ONGC and is as per format of ONGC, therefore contained clauses relevant only for the sake of application of bid with ONGC. In our considered opinion in case of any differences between the consortium members the agreement dated 04/05/03 are enforceable independently. Each consortium member raised separate invoices, on which ONGC shall honor both the invoices independently. It is also observed that both the members have agreed to maintain separate books of accounts which further emphasises their independent role of work with ONGC though work has to be performed jointly. Further it is also observed that no member had any role to play in respect of the scope of work allocated to the other member and neither of the consortium members shared any costs nor risk and had managed their own deliverables. Following the decision of AG, LINDE ENGINEERING DIVISION AND ANOTHER VERSUS DEPUTY DIRECTOR OF INCOME TAX [2014 (4) TMI 975 - DELHI HIGH COURT] - we hold that Consortium Agreement dated 04/05/03 between Slumberger Asia Services Ltd and Transocean Offshore Deepwater Drilling Pvt. Ltd., do not constitute an AOP. As on date, regarding prospecting for or extraction or production of mineral oil is not to be treated as technical services for the purposes of Explanation 2 to section 9 (1) (vii) and would rather be covered by section 44 BB of the Act. Transocean Offshore Deepwater Drilling Inc. being consortium member has rightly offered to tax the receipts u/s 44BB in the return of income. Disallowing the reimbursement of expenses - Held that:- These are payments related to the services rendered by assessee, and forms part of the receipts. Respectfully following the decision of Hon’ble Supreme Court in case of Sedco Forex [2017 (11) TMI 78 - SUPREME COURT] we hold that these payments are to be included while computing income u/s.44 BB of the Act. Levy of interest u/s.234B - Held that:- Assessee cannot be levied with the interest under section 234B of the Act. SEE DIT, Intl.Tax.-I vs. G.E.Parts INC. [[2016 (8) TMI 1357 - SUPREME COURT]]
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