TMI Blog2012 (8) TMI 280X X X X Extracts X X X X X X X X Extracts X X X X ..... on contained in Explanation (2) to section 9(1)(vii) of the Act is not attracted in the case of the applicant -Since the consideration received by the applicant is for rendering technical or consultancy services, on question no. 1, it has to be ruled that the income derived by the applicant has to be construed to be in the nature of "fees for technical services‟ in terms of section 9(1)(vii). Whether the consideration received by the applicant has to be deemed to be "royalty‟ under section 9(1)(vi) - as the Revenue itself in its objection suggested that the consideration received would be fees for technical services to be dealt with as such in this state it no ruling on this question required. Whether the income derived b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an agreement with the applicant for the processing of the acquired seismic data. In terms of that agreement the applicant had to render to the UAE company during the period from December, 2007 to June 2008 on board its vessals the processing and reprocessing the raw data obtained from it, interpreting the processed data and preparing data packages of the processed data and providing them to that company. For this purpose, the data processing analyst alongwith the required hardware and software were present on board the vessels of the UAE Company. 3. The applicant approached the concerned authority under the Income-tax Act for determination of the withholding rate of tax. The applicant was not given the benefit of rate of taxation on the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndertaken by the recipient .‟ since the services were rendered in connection with exploration for oil. It is further contended that even if it is treated as fees for technical services, it is covered by section 44BB(1) of the act and the proviso to that provision has no application. It is pointed out that the income derived by the applicant related to the assessment years 2009-10 and 2010-11 and the amendment to the proviso to section 44BB(1) of the Act with effect from 1.4.2011 had no application. It is also pointed out that in any event, section 44D, section 44DA and section 115A had no application, since the applicant, a non-resident, was not deriving any income from the Government or an Indian concern, but was receiving income fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out of the definition of "fees for technical services‟. Explanation (2) to section 9(1)(vii) of the Act describes fees for technical services as meaning any consideration for rendering of any managerial, technical or consultancy services including the providing of services of technical or other personnel. It is clear on the facts as set out by the applicant that the applicant has provided technical personnel for analyzing the data gathered and rendered to the UAE Company, technical and consultancy services. But what is contended is that since rendering of the services relates to a mining or like project undertaken by ONGC which had contracted with the UAE Company for collection and analysis of seismic data, the exception in Explanati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n or production of mineral oil. I am, therefore, satisfied that the exception contained in Explanation (2) to section 9(1)(vii) of the Act is not attracted in the case of the applicant. Mining or like project undertaken by the recipient are words of significance and there is no warrant for whittling down the importance of those words especially understood in the context of the language used in section 44BB(1) of the Act. Since the consideration received by the applicant is for rendering technical or consultancy services, on question no. 1, it has to be ruled that the income derived by the applicant has to be construed to be in the nature of "fees for technical services‟ in terms of section 9(1)(vii) of the Act. 9. Question no. 2 r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DA, Section 115A or section 293A of the Act apply for the purpose of computing the profits or gains or any other income referred to in those sections, they are out of section 44BB(1) of the Act. In other words, as far as technical services are concerned even when they are rendered in connection with mining activity, they would not be eligible to be assessed under section 44BB(1) of the Act if they come within sections 44D, 44DA or section 115A of the Act. As observed by Lord Watson in West Derby Union vs. Metropolitan Life Assurance Society (1897) A.C. 647, there may be and are many cases in which the terms of an Intelligible proviso may throw considerable light on the ambiguous import of the statutory words. These observations were notic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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