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TMI Blog2012 (8) TMI 280X X X X Extracts X X X X X X X X Extracts X X X X ..... award a contract to a company based in the United Arab Emirates (UAE), for undertaking a Seismic survey on the Cauvery and Krishna Godavari basin. The UAE company carried out the seismic data acquisition on board its vessals. That company entered into 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 softwar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e fees for technical services in terms of section 9(1)(vii) of the Act since it will come under the exception contained in Explanation (2) to that section, namely, does not include consideration for any construction, assembly, mining or like project, undertaken 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the applicant can be construed to be in the nature of "fees for technical services‟. As noticed, the argument on the side of the applicant is that the income falls under the exception in Explanation (2) to section 9(1)(vii) of the Act and hence comes 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, technic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applicant, on its own showing, is engaged in the business of providing services or facilities in connection with the prospecting for oil but clearly the applicant cannot be said to have undertaken a mining or like project or the work of prospecting for extraction 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 ren ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r extraction of mineral oil. 11. Whatever ambiguity there might be in section 44BB(1) of the Act on this aspect, that stands clarified by the proviso to that sub-section. The proviso makes it clear that those cases where the provisions of sections 44, 44D, 44DA, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome by way of fees for technical services received from Government or an Indian concern. On this short ground, the contention of the Revenue that the income derived by the applicant is independently assessable under section 115A or 44DA of the Act, has to be rejected. Since income derived by the applicant, is from an activity in connection with the prospecting for mineral oils and from a foreign company, the applicant would be entitled to claim to be assessed under section 44BB(1) of the Act. The ruling, therefore, on question no. 3 is that the income derived by the applicant are to be computed in accordance with the provisions of section 44BB(1) of the Act. 13. Accordingly, the ruling is pronounced on this, the 1st day of August, 2012.< ..... X X X X Extracts X X X X X X X X Extracts X X X X
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