TMI Blog2012 (8) TMI 200X X X X Extracts X X X X X X X X Extracts X X X X ..... project and is only performing certain services for Naptogaz. At best,consideration received by the applicant for the services it renders is fees for technical services within the meaning of section 9(1)(vii). Section 44BB(1) clearly states that fees for technical services received for rendering services in connection with prospecting for or extraction or production of mineral oils, cannot be brought under this section if section 44DA or section 115A of the Act applied to it and as the applicant is a non-resident receiving consideration for the technical services rendered by it, from an Indian company so clearly section 44DA or section 115A(b) would be attracted - the income-derived by the applicant in India is liable to be independently ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, the applicant approached this Authority for Advance Rulings on the following two questions:- (1) Whether the income derived by the applicant in India in terms of the contract No. Naptogaz/CB-ON-2004/ 5/2009/ CC003 is covered under the provisions of section 44BB and is not liable to be independently taxed as "fees for technical services" in terms of section 9(1)( vii ) of the IT Act, 1961? (2) Whether service tax charged and collected by the applicant from M/s Naptogaz India Private Ltd. would form part of gross receipts for purpose section 44BB of the IT Act, 1961? This Authority allowed the Application under section 245R(2) of the Act for rendering rulings on the above two questions. The application was thereafter heard in detai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion contained in Explanation (2) to section 9(1)( vii ) of the Act was not applicable since the applicant had not undertaken any mining or like project, it was merely rendering service to a company that had undertaken that project. The service rendered by the applicant was technical in nature and the fees collected as consideration for it was 'Fees for Technical Services' and taxable as such under the Act. There was no tax convention with Cayman Islands. 5. What the applicant renders, is technical services, it is also in connection with exploration of mineral oils. The question is whether the consideration received by the applicant for these technical services will come under the exception in Explanation (2) to section 9(1( vii ) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tly in the Ruling in AAR 1119 of 2011. Following this line of reasoning, I hold that the consideration received by the applicant for the services it renders to Naptogaz is fees for technical services within the meaning of section 9(1)( vii ) of the Act. 6. Though the Revenue sought to contend that Mud Engineering Services to be rendered by the applicant cannot be said to be services in connection with prospecting for or extraction or production of mineral oils, on a consideration of the purpose for which the services are rendered, as explained by the applicant, I am inclined to conclude that the services rendered are in connection with extraction of mineral oil. Prima facie therefore the applicant could invoke section 44BB(1) of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pecting for or extraction or production of mineral oils, cannot be brought under this section if section 44DA or section 115A of the Act applied to it. 8. The consequences arising from this, is sought to be got over by the applicant only by relying on the exception in section 9(1)( vii ) of the Act. I have already found that the exception does not apply. So, necessarily the quest indicated, is to see whether the provisions of section 44DA or section 115A is attracted. The applicant is a non-resident. It is receiving consideration for the technical services rendered by it, from an Indian company. So, clearly section 44DA or section 115A( b ) would be attracted. The applicant has not asked the question whether it can be considered to have ..... X X X X Extracts X X X X X X X X Extracts X X X X
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