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2019 (12) TMI 1230 - AT - Income TaxIncome accrued in India - PE in India - applicability of section 44BB - non-resident assessee - Receipts earned from provision of services through various vessels - DTAA - computing profits and gains in connection with the business of exploration of mineral oil. - HELD THAT:- The word ‘services’ followed by expansive phrase ‘in connection with’ are relatable to prospecting for and exploration of mineral oil. That means, all services associated with prospecting for and exploration activities are brought within the scope and reach of section 44BB. Another category of assessees governed by section 44BB are those supplying plant and machinery on hire. In the instant case, we find that neither the AO nor the DRP has examined the applicability of section 44BB by looking into whether the pith and substance of each of the contract/agreement entered by the assessee is inextricably connected with prospecting, extraction or production of mineral oil. This is evident from the order of the DRP dated 29.08.2018 passed u/s 144C(5) and the assessment order dated 19.09.2018 passed by the AO u/s 143(3) r.w.s. 144C(5) and 144C(13) of the Act. Therefore, we set aside the order of the AO and restore the matter to him to make an order afresh after examining each of the contract/agreement and by following the ratio laid down by the Hon’ble Supreme Court in ONGC [2015 (7) TMI 91 - SUPREME COURT] . - Thus the 2nd to 8th ground of appeal are allowed for statistical purposes.
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