Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2012 (12) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2012 (12) TMI 422 - HC - Income TaxApplicability of section 44BB or Section 44DA - revenues earned in respect of services in connection with the prospecting for extraction or production of mineral oils - Revenue contended that the AAR erred in its decision that Section 44BB would apply to the present case and that it failed to note that the appropriate provision to be applied was Section 44DA read with section 9(1)(vii), Explanation 2. On the other hand the contention urged on behalf of the assessee is that it is Section 44BB which is the more specific of the two sections and which made "special provision for computing profits and gains in connection with the business of exploration, etc. of mineral oils" that was applicable and not Section 44DA which made "special provision for computing income by way of royalties, etc. in case of non-resident". Held that:- Under section 44BB one does not find any reference to a permanent establishment in India. The type of services contemplated by the provision is more specific than what is contemplated by Section 44DA. Section 44BB refers specifically to "services or facilities in connection with, or supplying plant and machinery on hire, used or to be used in the prospecting for, or extraction or production of mineral oils". Revenues earned by the non-resident from rendering such specific services are covered by Section 44BB. It is a well settled rule of interpretation that if a special provision is made respecting a certain matter, that matter is excluded from the general provision under the rule which is expressed by the maxim "Generallia specialibus non derogant". It is again a well-settled rule of construction that when, in an enactment two provisions exist, which cannot be reconciled with each other, they should be so interpreted that, if possible, effect should be given to both. If as contended by the Revenue, Section 44DA covers all types of services rendered by the non-resident, that would reduce section 44BB to a useless lumber or dead letter and such a result would be opposed to the very essence of the rule of harmonious construction. The amendment made by the Finance Act, 2010 w.e.f. 01.04.2011 in both the sections, cannot have the effect of altering or effacing the fundamental nature of both the provisions or their respective spheres of operation or to take away the separate identity of Section 44BB. Profits shall be computed in accordance with the provisions of section 44BB of the Act and not section 44DA. - Decision of AAR upheld - Decided in favor of assessee.
|