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2018 (4) TMI 1363 - AT - Income TaxReceipt from non-PSC partners - nature of Fee for Technical Services and royalty - AO taxed the same @25% as were effectively engaged with the PE - scope of section 44BB in view of the proviso in section 44BB/44DA/115A declined - extraction or production of mineral oil - as per revenue VAT and Service Tax reimbursements necessarily form part of the gross receipts and the same should be taxed - Held that:- Case of the assessee is also supported by the judgment in the case of SBS Marine Ltd. vs. ADIT [2015 (8) TMI 1253 - UTTARAKHAND HIGH COURT] and ONGC vs. CIT (2015 (7) TMI 91 - SUPREME COURT). As held where the pith and substance of each of the contracts/agreements is inextricably connected with prospecting, extraction or production of mineral oil and where the dominant purpose of each of such agreement is for prospecting, extraction or production of mineral oils, though there may be certain ancillary works contemplated there under, the payments received under the said contracts would be more appropriately assessable under the provisions of section 44BB and not Section 44D of the Act. For includibility of Service Tax/VAT reimbursement in the gross receipts is concerned, it is seen that the issue is squarely covered by the judgment of the Hon'ble Delhi High Court in the case of Mitchell Drilling International Pty. Limited (2015 (10) TMI 259 - DELHI HIGH COURT) wherein held that service tax being statutory levy should not form part of gross receipts as per provisions of section 44BB of the Act - Decided against revenue
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