TMI Blog2010 (3) TMI 113X X X X Extracts X X X X X X X X Extracts X X X X ..... y incorporated in Singapore, for the provision of seismic vessel. Held that - as per Section 44BB read with Part II of the First Schedule to the Income Tax Act, the effective rate at which the tax has to be withheld from the payments made by the applicant to P.F. Thor would be 4.223% - As the amounts falling under Section 44BB of I.T. Act have been excluded from the purview of the royalty definition, this question has to be answered in the negative. Once Section 44BB is attracted, it is common ground that the computation has to be made in accordance with that provision and no other special provision, viz., Section 44DA or Section 115-A would come into play in view of the fact that the payment is being made by a non-resident to another non ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and in law, even if the consideration for services provided by M C be construed to be in the nature of 'Fees for technical services' under section 9(1)(vii) of the Act, nevertheless, the income chargeable to tax ought to be computed having regard to the computational mechanism under section 44BB of the Act? 6. Having regard to findings on the above questions, at what rate should the applicant withheld tax on payments made to M C towards time charter of seismic vessel? 2. The learned counsel for the applicant has stated that Question no. 6 is unnecessary and therefore is not pressed. 3. The applicant is a marine geophysical company that conducts seismic survey and provides offshore seismic data acquisition and other associated servi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed an application under section 195 of the Income-tax Act, 1961 requesting for a withholding tax order @ 4.223% on the basis that the services rendered by PF Thor fall within the scope of section 44BB of the Act and accordingly the income chargeable to tax has to be computed as per that section. The Assessing Officer, without setting out any reasons, passed a withholding tax order according to which the applicant has to deduct tax at source at the rate of 10.56% on gross basis. Hence, this application. 6.. The facts of the present case and the questions raised are identical to those in an earlier application filed by the same applicant in AAR/823/2009 which was disposed of on 21st December, 2009. The only difference is that the ves ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to Section 9(1) (vii). The expression "services in connection with" has also been explained. Further, it was held that the income of such nature stood excluded from the purview of Explanation 2, as made clear by the CBDT in its circular. In the present case, we are not concerned with the controversy whether the character of payment is in the nature of 'royalty' as per section 9(1) (vi) because clause (iv a) of Explanation 2 to Section 9(1)(vi) excludes the amounts referred to in Section 44BB. That clause reads thus: "the use or right to use any industrial, commercial or scientific equipment but not including the amounts referred to in Section 44 BB" Apart from this specific exclusion, the learned counsel for the applicant sought to c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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