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TMI Blog2012 (5) TMI 111X X X X Extracts X X X X X X X X Extracts X X X X ..... ribed as „Corporation‟ and the applicant is described as „Contractor‟. It will be profitable to set down the terms of the contract at this stage. "Whereas CORPORATION is desirous of Services for Supply Installation and Commissioning of 36 manometer Gauges for carrying out CORPORATION‟s operations conforming to specifications as set forth in the Scope of Work at Annexure-III of this Agreement. And Whereas the CONTRACTOR represents that it has the necessary experience for carrying out CORPORATION‟s operations as referred to herein and has submitted a bid for providing the required services against CORPORATION‟s Tender No.MR/MM/WS/SER/MG/050/P66NC08003 in accordance with the terms and conditions herei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... title to the goods passed outside India, that the payment therefor was received outside India and that the transaction of sale was not taxable in India. While allowing the application under section 245R(2) of the Income-tax Act, 1961 (Act), this Authority framed the following three questions for giving a ruling:- 1) "On the facts and circumstances of the case, whether the amounts received/receivable by the applicant i.e. Roxar Maximum Reservoir Performance WLL, Bahrain ('Roxar') from Oil and Natural Gas Corporation Ltd. (ONGC) under Contract No. MR/MM/WS/SER/MG/050/P66NC08003/9010012082 for offshore supply of 36 manometer gauges (hereinafter referred as ONGC Contract) is chargeable to tax in India under the provisions of Income-tax Act, 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earned counsel of the applicant have now to be considered in the context of the pronouncement of the Supreme Court in Vodafone International Holdings BV Netherlands vs. Union of India and another (345 ITR 1 (SC). In that recent decision, a three judge bench of the Supreme Court has laid down that what is needed is to consider the transaction in its entirety and to look at the transaction as a whole. The Supreme Court has advocated that a transaction must be looked at and not looked through. The learned Chief Justice has held "it is the task of the Revenue / Court to ascertain the legal nature of the transaction and while doing so, it has to look at the transaction as a whole and not adopt a dissecting approach". This injunction has been fol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d erection done in India. The payment is received by the applicant for the performance of the contract as a whole in India. It is therefore clear that the income to the applicant accrued in India. 9. A contract for sale of goods differs from a contract for installation and commissioning of a project. The tests relevant for considering where the title to the equipment, passed would not be relevant while construing the terms of a supply and erection contract. Therefore the facts relied on by counsel for the applicant to argue that the title to the gauges passed outside the country, are of no avail. 10. An organization like ONGC, having issued a tender cannot go back on its terms while entering into a contract on acceptance of a bid in respo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s provided that the contractor shall be responsible for supply of equipment and materials and installation/commissioning of the equipments. 12. Based on the Invitation to Tender, it is argued that ONGC itself, while issuing it, envisaged independently, the supply of equipment and the installation. It is not possible to agree with this submission. Necessarily, these terms are also found in the contract entered into. On a proper reading of the Invitation to Tender and the contract entered into in the context of the object sought to be achieved by the contract, I have no hesitation in coming to the conclusion that it is a contract for installation of equipment which the tenderer itself is to supply. It is an indivisible contract. The o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion and commissioning of the manometer gauges is chargeable to tax under section 44BB of the Act. In view of my interpretation of the contract and the conclusion recorded above, the contract of services for supply, installation and commissioning of 36 manometer gauges is chargeable to tax under section 44BB of the Act, if it is found that the contract is for providing services or facilities in connection with prospecting for, or extraction of mineral oil. In the case on hand, services are rendered in connection with the prospecting and / extraction of oil by ONGC. Therefore, clearly, section 44BB of the Act is attracted. Hence, Question No.3, it is ruled that the, payment under the contract is taxable under section 44BB of the Act. Accordi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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