Home Case Index All Cases Income Tax Income Tax + AAR Income Tax - 2016 (5) TMI AAR This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (5) TMI 1341 - AAR - Income TaxApplicability of section 44BB - Profits derived by the installation permanent establishment for executing contract awarded by Indian Oil Corporation Limited (IOCL) for installation of SPM systems - whether assessable to tax in India as per the provisions of section 44BB of the Income-tax Act, 1961 ? - Held that:- We find that in this case the applicant had entered into two separate contracts with IOCL and L&T respectively. As regards contract with IOCL it was noted that the contract was loaded in favour of mobilisation expenses though it was a divisible one segregating the mobilising segments and other segments. Section 44BB is a special provision and has a self contained code relating to the taxability of non-resident for providing services in connection with prospecting for, extraction of and production of mineral oils and this section prevails over other general provisions including that of section 44DA. The provisions of section 44BB take into consideration the aggregate of amounts paid or payable to the assessee on account of the provisions of services and facilities in connection with, or supply of plant and machinery on hire used, or to be used, in the prospecting for, or extraction or production of, mineral oils in India. Therefore, it is the entire consideration received which will be considered for taxability and not the profits derived by the installation of permanent establishment of the applicant. During the course of hearing this fact was pointed out to Shri S.D. Kapila, learned counsel for the applicant and he had agreed to this proposition. We conclude that the entire consideration received by the applicant in respect of contract with IOCL for executing work of installation of SPM System, offshore and onshore pipelines and associated facilities for integrated offshore crude oil unloading facilities located at Paradip would be chargeable to tax under the provisions of section 44BB of the Income-tax Act.
|