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ADIT, International Taxation Versus TDI Brooks Intl. Inc. C/o. Nangia & Co.

2015 (6) TMI 487 - ITAT DELHI

Services for geophysical and geological interpretation of 3D and 2D seismic data - Whether are in the nature of fees for technical services (FTS) or should fall under sec. 44BB of the Act? - Held that:- In the present case, there is no dispute that the assessee is having PE in India as it is evident from the assessment order wherein the Assessing Officer has noted as “the PE of assessee in India is not disputed as the assessee has filed the return under sec. 44BB offering its income as taxable i .....

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the case of Geophzika Torun SP. GO. [2009 (12) TMI 4 - AUTHORITY FOR ADVANCE RULINGS] has been confirmed in the case of DIT vs. OHM Ltd. (2012 (12) TMI 422 - DELHI HIGH COURT). The said judgment was followed in the assessment year 2008-09 in the case of PGS Geophysical AS (2014 (7) TMI 723 - DELHI HIGH COURT ). In the light of above judgments held that for the relevant assessment year i.e. 2008-09, the assessee is entitled to declare its income under the provisions of sec. 44BB of the Act. The .....

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ing services for geophysical and geological interpretation of 3D and 2D seismic data are not Fees for Technical Services. 2. Whether on the facts and in the circumstances of the case, the CIT(A) has erred in applying the decision of the ITAT in the case of M/s. CGG Veritas overlooking the fact that the ITAT has clearly held that interpretation of seismic data are in the nature of FTS. 3. Whether on the facts and in the circumstances of the case, the CIT(A) has erred in holding that the income of .....

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PE and the said decision has not been accepted by the Department and an MA has been filed, while appeal was not filed purely on account of tax effect considerations. 5. Whether the CIT(A) has erred in the ignoring decisions of jurisdictional High Court in the case of CIT vs. ONGC as an agent of M/s. Foramer France and CIT vs. M/s. Rolls Royce Pvt. Ltd. (2007- TII-03-High Court Uttrakhand-Intt) holding that FTS is not eligible for 44BB. 6. Whether on the facts and in the circumstances of the cas .....

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ovision as the term services or facilities used therein are not defined and the two terms used are too general in nature and thus once the payments are characterized as royalty u/s. 9(1)(vi), they go outside the purview of sec. 44BB and have to be taxed as Royalty. 8. Whether the CIT(A), has erred in not appreciating that assessees reliance on Jindal Drilling is misplaced since S 44DAbeing the special provision for taxation of income in the nature of royalties and FTS where these are effectively .....

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by the Finance Act, 2011 was only clarificatory in nature and its application has to be read into the Act in view of the decision of the Apex Court in the case of Sedco Forex International Drilling vs. CIT. 2. The issue involved in the above grounds is as to whether the services rendered in connection with 2D and 3D Seismic Data are in the nature of fees for technical services (FTS) or should fall under sec. 44BB of the Act? 3. We have heard and considered the arguments advanced by the parties .....

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le processing, prevention and transportation, laboratories analysis and interpretation and report. During the course of assessment proceedings, the assessee was asked to explain why looking at the nature of services, receipt may not be treated as fees for technical services and tax accordingly. The Assessing Officer did not agree with the explanation of the assessee and held that the assessee is rendering technical services and, therefore, its income is not covered under sec. 44BB of the Income- .....

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eals) has simply ignored the decision of Hon'ble jurisdictional High Court in the case of CIT vs. ONGC - 2007.TII.03.H.C.UKHAND-INTL. The Ld.CIT(DR) pointed out that the Delhi Bench of the ITAT in the case of Siem Offshore A.S. & Ors. Vs. ADIT - ITA No. 1295/Del/2013 (A.Y. 2008-09) and ors. Vide order dated 09.09.2014 in view of the decision of Hon'ble Delhi High Court in the case of PGS Geophysical A.S. vs. ADIT - ITA Nos. 612 of 2012, order dated 09.07.2014 has set aside the matter .....

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essee in India was effectively connected with the PE in India. 6. The Learned AR on the other hand pointed out that the issue raised in the present appeal regarding the eligibility of the assessee to claim taxability under sec. 44BB(1) of the Act is now fully covered in favour of the assessee by the decision of Hon'ble Delhi High Court in the case of PGS Geophysical AS vs. ACIT - 269 CTR 433 (Del.) holding that 2D and 3D Seismic Services shall come within the ambit of section 44BB of the Inc .....

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ct after examining the aspect of PE and effective connection with the PE in India regarding revenue of the assessee. The Learned AR also referred the decision of Delhi Bench of the ITAT in the case of M/s. Fugro Geotem AS Vs. ADIT- ITA No. 5823/Del/2011- order dated 21.11.2014 holding that 2D and 3D Seismic Services shall come within the ambit of sec. 44BB of the Act. He referred para No. 5 of the said decision. He submitted further that facts in the case of CIT vs. ONGC (supra) are distinguisha .....

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s eligible for claiming the benefit of taxability under sec. 44BB(1) of the Act is now covered by the decision of Hon'ble Delhi High Court in the case of PGS Geophysical AS vs. ACIT (supra) wherein the Hon'ble High Court has been pleased to hold that if the Assessing Officer finds that (i) the assessee had a PE in India during the relevant period and (ii) if the first condition is satisfied and the Assessing Officer finds that contract entered into by the assessee with the contractor wer .....

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