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2017 (10) TMI 1449 - ITAT DELHIBenefit of tax treatment provided u/s 44BB - receipt from rental of vessels received from non-production sharing companies (i.e. second leg contracts) - royalty under section 9(1)(vi) or it is a receipt chargeable to tax under section 44 BB - CIT(A) has erred in holding that no distinction can be made between receipts from Production Sharing Contract Participants ('PSC partners') and Non-Production Sharing Contract entities (Non PSC Partners) and between services rendered by first-leg and second-leg vendors - HELD THAT:- Services and facilities provided by the assessee along with plant and machinery are used in offshore drilling operations i.e., the activity of prospecting for or extraction or production of mineral oils. Consequently, the requirements of section 44BB are satisfied in the present case. There is no merit in the contentions of the revenue that the assessee is not an eligible assessee under section 44BB since it has not directly entered into contract with the ONGC and it is not undertaking the activities specified in section 44BB itself and being second leg contractors they are not eligible under section 44BB. On the issue of operation of the amendment to section 44BB and 44DDA, the CIT-(A) has observed that considering the interpretation contained in OHM LTD. [2012 (12) TMI 422 - DELHI HIGH COURT] the position of the case would not change specially when the services are squarely covered in consonance with what is envisaged under section 44BB of the Act. We find that the Tribunal in [2016 (2) TMI 921 - ITAT DELHI] has also held the services rendered as envisaged under section 44BB of the Act. The Ld. CIT-(A) has followed the decision of the jurisdictional High Court on the issue in dispute and thus, we do not find any error in the finding of the ld. CIT-A. Charging of interest under section 234B - HELD THAT:- Interest u/s 234B & 234C is not chargeable, since assessee is a nonresident and as such tax is to be deducted at source by Indian party. The Hon’ble High Court in the case of DIT Vs. NGC Network Asia [2009 (1) TMI 174 - BOMBAY HIGH COURT] and in the case of DIT Vs. Clifford Chance LLP [2009 (7) TMI 1215 - BOMBAY HIGH COURT] has decided issue in favour of assessee.
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