TMI Blog2011 (5) TMI 13X X X X Extracts X X X X X X X X Extracts X X X X ..... cant who desires to know which part of its income accrues or arises in India and how much - The applicant can exercise its rights provided it opts to get the income computed under section 44BB(3) of the Act - The scheme of computation of income under this section does not provide any leeway to apply simultaneously both the sub-sections (1) and (3) of section 44BB to the income arising from the business activities falling under the ambit of sect ion 44BB(1) of the Act. seismic data acquisition and processing contracts - If a part of the income falls under "Royalties or Fees for Technical Services", there is no scope to assess such receipts under these heads, once it is held that the income is from its oil exploration and production activit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s starting from conducting the survey and then processing and interpretation of data acquired through survey is driven towards assisting the oil and gas clients in their exploration operations. The services are part of the exploration/prospecting activities for mineral oil and clearly fall under the ambit of section 44BB of the Act. The applicant further states that for the purposes of conducting seismic surveys, the vessel is mobilized from outside India to the site area in India where the work is to be carried out. Similarly, when the vessel is demobilized, after completion of the work, it involves moving out of equipment and personnel from the site area. The applicant is paid for mobilization as well as demobilization of its vessel from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing a mining or like project. Such project is undertaken by someone else and certain technical services are rendered by the applicant to the business enterprise that takes up the project. In short the Revenue contends that section 44 BB would come into play only if the applicant goes out of the purview of section 9(1)(vii) of the Act, read with Explanation 2 thereof. 4. In response, applicant has stated that this Authority had the occasion to examine the issue in the case of Geofizyka Torun Sp.zo.o, in AAR/813 of 2009, 320 ITR 268 wherein this Authority, after a detailed discussion, held the view that: If the business is of the specific nature envisaged under 44 BB, the computation provision therein would prevail over the computation p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er section 5, it can not be computed in the manner provided in the Act. The income can be subjected to tax in India only if it accrues or arises in India or is deemed to accrue or arise in India. Thereafter, under Explanation to section 9(1)(i), income of the business in which all the operations are not carried out in India, only such part of income as is reasonably attributable to the operations carried out in India would be the income deemed to accrue or arise in India. Applying the above stated law the applicant is of the view that any receipt can be subjected to tax under section 44 BB only if it is chargeable to tax under the Act. The learned Advocate submitted that mobilization and demobilization revenues to the extent attributable to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e sub-sections (1) and (3) of section 44BB to the income arising from the business activities falling under the ambit of section 44BB(1) of the Act. Even if part of the income falls under Royalties or Fees for technical Services, there is no scope to assess such receipts under these heads, once it is held that the income is from its oil exploration and production activities as envisaged under section 44BB. We are of the view that if the applicant desires to know the answers to the two issues, then it has to first exercise the option to get its income computed under section 44BB(3). In view thereof, we answer the Question No.2 by saying that the entire mobilization/demobilization revenues received by the applicant with respect to seismic d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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