TMI Blog2012 (5) TMI 111X X X X Extracts X X X X X X X X Extracts X X X X ..... f it – against assessee. Part of the payment towards price of the manometer gauges cannot be considered divorced from the payments received for the performance of entire obligations under the contract. Payment received by the applicant for installation, erection and commissioning of the manometer gauges – Held that:- The contract of services for supply, installation and commissioning of 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 – the services are rendered in connection with the prospecting and / extraction of oil by ONGC, hence section 44BB of the Act is attracted - agains ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d vide its letter No. MR/MM/WS/SER/MG/050/P66NC08003 dated 25.6.2009 on the CONTRACTOR. Now it is hereby agreed to by and between the parties as under:- In consideration of the payments to be made to the CONTRACTOR for the performance of work to be executed by the CONTRACTOR in the manner specified in this Contract, the CONTRACTOR hereby covenants with the CORPORATION that the CONTRACTOR shall and will duly provide, execute and complete the work described in the CONTRACT and shall do and perform all other acts and things mentioned or described in the Agreement or which are to be implied there from or may be reasonably necessary for completion of the WORK in the manner and subject to the terms and conditions or stipulations mentioned in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndia? 3) On the facts and circumstances of the case, whether the amounts received/receivable by the Applicant under the ONGC Contract for installation, erection and commissioning of 36 manometer Gauges is chargeable to tax under the provisions of Section 44BB of the Act? 4. This Authority also reserved for consideration the question whether the transaction was designed for avoidance of tax in India, while considering the application under section 245R(4) of the Act. 5. It is argued on behalf of the applicant that the contract was an offshore supply contract, that the title to the goods passed to ONGC offshore, that the payment was received by the applicant offshore and that the taxing authorities under the Income-tax Act had no jurisd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a composite contract into two parts and holding one of the parts not amenable to taxation in India. The decision in Vodafone having been rendered by a three judge bench, it is not proper or open to this authority, to follow the approach made in the decision in Ishikawajima-Harima and to adopt a dissecting approach to the contract in question. What is called for is an understanding of the nature of the contract on an advertence to its terms. 8. A contract has to be read as a whole. The purpose for which the contract is entered into by the parties is to be ascertained from the terms of the contract. In the case on hand, ONGC clearly called for a contract for services for supply, installation and commissioning of 36 manometer gauges . The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... up at the instance of the bidder so as to affect the object of the tender or the terms of the tender notification. So, a separate payment schedule, if any, agreed to, cannot alter the terms of the tender. 11. Along with its written submissions filed on 25.04.2012, the applicant has produced the Invitation to Bid‟ floated by ONGC. The description of the work therein is Hiring of Services for Supply, Installation and Commissioning of 36 manometer Gauges. The Scope of Work‟ included as Annexure III to that invitations reiterates that it is Contract on Supply, Installation and Commissioning of Permanent manometer Gauges along with necessary accessories for 36 wells of Mumbai Offshore . The Scope of the Work‟ states: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , I have no hesitation in over ruling the argument that the contract contains two distinct parts and they have to be separated for the purpose of taxation. I am also not able to agree with the submission that both the parties to the contract intended to treat the two scopes of work to be treated separately. 13. Thus, on a true construction of the contract in question, I come to the conclusion that the income thereunder has arisen to the applicant in India. 14. Therefore, question No.1 formulated by the applicant has to be answered against the applicant by ruling that all payments received by the applicant under the composite contract with ONGC is income chargeable to tax in India under the provisions of the Income-tax Act. The contract ..... X X X X Extracts X X X X X X X X Extracts X X X X
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