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TMI Blog2012 (8) TMI 200X X X X Extracts X X X X X X X X Extracts X X X X ..... Mud-Laboratory, operating Personnel (Mud-Engineers) and Mud Chemicals. Naptogaz along with others has the right 'to carryout petroleum operations in Block CB-ONN-2004/05' pursuant to a Production Sharing Contract. 2. The services to be rendered by the applicant under its contract, generally described as Mud Engineering Services, are to be rendered in connection with exploration and extraction of mineral oil. The compensation received by the applicant for the services rendered by it with Naptogaz is liable to be assessed under section 44BB of the Income-tax Act. The applicant made an application under section 197 of the Act on such a claim in respect of the withholding of tax under section 195 of the Act. But the Assessing Officer did not a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 44DA or section 115A of the Act. The amendment to the proviso to section 44BB(1) of the Act with effect from 1-4-2010, would not affect the position in the light of the exception and the consideration not being Fees for Technical Services. The vide scope of the expression 'in connection with' in section 44BB(1) of the Act is highlighted with reference to the Ruling of this Authority in Geofizyka Town Sp.zo.o.(AAR No.813 of 2009). 4. On behalf of the Revenue it is contended that what is rendered by the applicant is technical services and section 44DA or section 115A was attracted. By virtue of the proviso to section 44BB(1) of the Act, the payment received by the applicant cannot be brought within section 44BB(1) of the Act, even if t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roject? Undertaking a mining project would indicate that the recipient must have undertaken the project itself. That would be the person who has undertaken the mining project. Every contractor for part of the work involved in the mining project, cannot be considered to have undertaken the mining or like project. Doing the work of Mud Engineering cannot be understood as the undertaking of the mining project. Here, that project is undertaken by Naptogaz. The applicant is only performing certain services for Naptogaz. At best, the applicant can claim that it is rendering services in connection with or in relation to a mining project. That is not the same as undertaking a mining or like project. This Authority has accepted this position in its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4BB(1) of the Act (without giving into that question) the question is whether in view of the proviso to section 44BB(1) of the Act, the applicant can claim to be assessed under section 44BB(1)of the Act. 7. Fees for technical services in respect of a foreign company is liable to be computed in terms of section 44D or section 44DA or Section 115A of the Act. Section 44BB(1) contains a proviso taking out from within the purview of section 44BB(1), cases where the provisions of sections 42, 44D, 44DA, section 115A or section 293A apply. Section 44DA was introduced with effect from 1.4.2011 by Finance Act, 2010, after the Ruling in Geofizyka was given. Reading section 44BB(1) in the light of the provisio thereto, it is clear that fees for tech ..... X X X X Extracts X X X X X X X X Extracts X X X X
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