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TMI Blog2012 (10) TMI 202X X X X Extracts X X X X X X X X Extracts X X X X ..... missing the claim of the Appellant that its activity of seismic data acquisition and processing is an integral part of prospecting for mineral oil and therefore its income from such activities should be computed in accordance with the provisions of section 44BB of the Act. These services have a direct and definite bearing on exploration activities undertaken by petroleum and gas enterprises. 2. The Ld. Assessing Officer has erred on facts and in law in ignoring that the consideration arising under contracts for seismic data acquisition and processing services, which may range from six months to five years, do not qualify as 'fee for technical services' as defined in Explanation 2 to section 9(1)(vii) of the Act (herein after refer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nection with prospecting for, or extraction or production of, mineral oils in India. However, the Assessing Officer was of the view that the income was received by the assessee as fee for technical services as defined under sec.9(1)(vii) of the Act and not under sec. 44BB of the Act. The revenue from ONGC, RIL and Gujarat State Petroleum Ltd. were squarely covered by Provisions of sec. 9(1)(vii) read with sec. 115A of the Act. Therefore, the income of Rs. 756,17,15,932/- was assessable @ 10%. As regards revenues earned from Cairn Energy India Pty. Ltd. and Hardy Exploration & Production (India) Inc., the Assessing Officer brought to tax the amount under sec. 9(1)(vii) read with sec. 28 of the Act by bringing the sum of Rs. 6,71,54,604/- as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... examined the issue as to whether the assessee had PE or fixed place of profession during the relevant period or not. The AO had also not examined the dates on which the contracts were entered into. If the date of contract was before 1.04.2003, the provisions of sec. 44D would be applicable. Since the issue has not been examined by the AO with reference to Permanent Establishment, the learned CIT-DR requested that the matter may be remanded back to the file of the AO with the directions to examine the issue relating to Permanent Establishment and decide the case in accordance with the decision of ITAT in the case of CGG Veritas Services, SA (supra) or the ratio of any other case which will be applicable at that point of time. 5. We have he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business or fixed place of profession in India, will be taxable u/s 115A(1)(b) of the Act. As observed earlier section 44DA was inserted in proviso to section 44BB(1) by the Finance Act, 2010 with effect from 1.4.2011 and simultaneously inserted second proviso to section 44DA applicable from assessment year 2011-012 according to which provisions of section 44BB(1) will not be applicable in respect of income referred to this section. On combined reading of proviso to section 44BB(1) and second proviso to section 44DA it is clear that the fee for technical services rendered in connection with prospecting for or extraction or production of mineral oil though effectively connected with PE or fixed place of profession will fall not under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e simple reason that proviso to section 44BB(1) does not contain section 44DA for these years." From above decision it is clear that (i) Fee for technical services having business PE or fixed place of profession will be assessable under sec. 44DA. (ii) Fee for technical services without having business PE or fixed place of profession will be assessable under sec. 115A. The Tribunal has further held that fee for technical services from Assessment Year 2011-12 whether rendered in connection with prospecting for or extraction or production of mineral oil will be assessable either under sec. 44DA or under sec. 115 depending upon the fact whether such receipts are effectively connected with PE or fixed place of profession or not. However, for t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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