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2015 (2) TMI 899 - AT - Income TaxIncome from provision of seismic survey vessels on hire to CGG Services (erstwhile Compagnie General De Geophysique (CGG) / CGG Marine) - taxable under the provision of section 44BB of the Income Tax Act, 1961 OR as "royalty" under section 9(1 )(vi) of the Act - DRP held that the income earned from provision of seismic survey vessel is also taxable as "royalty" under Article 13 of India-France DTAA - Held that:- On no stretch of imagination can we hold that the nature of receipts on account of provision of supply of vessels on hire basis can have character of fees for technical services within the meaning of Expln. 2 to s. 9(1)(vii). The services required by CGG (Hirer) are rendered by the assessee by lending the vessels on hire cannot bear the character of fees for technical services. The assessee's income no doubt is derived from letting out the plant/ship which is used for prospecting for or extraction or production of mineral oil, therefore, the second limb of sec. 44BB is clearly attracted in the instant case. The non-resident assessee in our opinion satisfies the requirement stipulated by sec. 44BB and thus, qualifies its income earned thus to be treated and taxed as per the special provision and not otherwise as contended by the Revenue. We could not find any restriction or fetter in section 44BB as contended by the Revenue to disqualify the assessee in applying the said section to compute its tax. We cannot read what is not said in sec. 44BB and add words in sec. 44BB to bring in a restricted interpretation as contended by the Revenue to the effect that only direct contract with the oil producing company would only qualify. It is nobody's case that assessee is not a non-resident nor it has not given on hire its ship for the purpose of prospecting for or extracting or production of mineral oils. So the assessee falls in the special provision meant for computing profits and gain in connection with the business of exploration etc. of mineral oils; and its income has to be computed as per the said provision unless and otherwise the assessee claims lower profits and gains as stipulated under sub-section (3) of section 44BB. Also we take note of the fact that in A.Y. 2004-05, the AO accepted the claim of the assessee that the income need to be taxed u/s 44BB and in A.Y. 2006-07 the DRP also directed that the income of the assessee to be taxed as per sec. 44BB of the Act. No changes in facts or circumstances were pointed out by the ld. DRP in the instant assessment year. See Commissioner of Income-Tax Versus Rajeev Grinding Mills.(2003 (4) TMI 7 - DELHI High Court ). Thus on the principle of consistency too no deviation was warranted. - Decided in favour of assessee.
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