TMI Blog2016 (1) TMI 134X X X X Extracts X X X X X X X X Extracts X X X X ..... 68/Del/2011 - - - Dated:- 30-12-2015 - Sh. N. K. Saini, AM And Sh. Kuldip Singh, JM For the Petitioner : Sh. Rakesh Nangia, Anil Arora Suraj Nangia, CAs For the Respondent : Sh. Anuj Arora, CIT DR ORDER Per N. K. Saini, AM This is an appeal by the assessee against the order dated 12.10.2011 of the AO. 2. Following grounds have been raised in this appeal: Addition qua hiring of equipment used in connection with exploration /prospecting/extraction of mineral oil 1. That the assessing officer erred on facts and in law in completing assessment under section 144C/143(3) of the Income-tax Act, 1961 ( the Act )at an income of ₹ 79,657,020/- as against the income of ₹ 7,523,009/- returned by the appellant. 2. That the assessing officer erred on fact and in law in holding that revenues of ₹ 75,657,020/- arising from performance of associated drilling activity through the provision of oilfield equipment on hire along with operating personnel, used the exploration/prospecting/extraction of mineral oil were fees for technical services under section 9(1)(vii) of the Act as opposed to revenues chargeable to tax in terms of sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d equipment on hire along with operating personnel. 4. Facts of the case in brief are that the assessee filed the return of income on 29.07.2006 declaring an income of ₹ 75,23,009/- which was processed u/s 143(1) of the Income Tax Act, 1961 (hereinafter referred to as the Act). Thereafter the notice u/s 148 of the Act dated 31.03.2010 was issued to the assessee, inconsequence to the same a draft assessment order dated 30.12.2010 was passed and issued to the assessee. The AO worked out the total income at ₹ 8,06,65,358/- chargeable to tax as per Section 115A r.w.s. 9(1)(vii) of the Act. Thereafter the assessee filed objection with the Dispute Resolution Panel (DRP). As regards to the rejection of assessee s claim to be taxed u/s 44BB of the Act and in treating the receipts as fee for technical services, the DRP observed that the issue as to whether Wireline and Slickline services were covered by Section 44BB of the Ace came up for consideration of the DRP in the case of M/s Precision Energy Services Ltd. for the assessment year 2007-08 wherein the stand taken by the AO that income for providing Wireline services was taxable as fee for technical service and not taxab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in the drilled oil wells located in the Panna/Mukta oilfield, from M/s Cairn Energy India Pty Ltd. for the slickline services to be performed in Rajasthan and from M/s Oil Natural Gas Corporation for the provision of Wireline and Gas Lift Services. The claim of the assessee was that its income was taxable u/s 44BB of the Act. The said claim of the assessee was denied by the AO. 8. Now this issue has been settled by the Hon ble Apex Court in the case of Oil Natural Gas Corporation Ltd. Vs CIT Anr. in Civil Appeal No. 731/2007 vide order dated 01.07.2015. In the said case it has been held as under: 13. The Income Tax Act does not define the expressions mines or minerals . The said expressions are found defined and explained in the Mines Act, 1952 and the Oil Fields (Development and Regulation) Act 1948. While construing the somewhat pari materia expressions appearing in the Mines and Minerals (Development and Regulation) Act 1957 regard must be had to the provisions of Entries 53 and 54 of List I and Entry 22 of List II of the 7th Schedule to the Constitution to understand the exclusion of mineral oils from the definition of minerals in Section 3(a) of the 1957 Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... set out below. S. No. Civil Appeal No. Work covered under the contract 1. 4321 Drilling of exploration wells and carrying out seismic surveys for exploratory drilling. 2. 740 Drilling, furnishing personnel for manning, maintenance and operation of drilling rig and training of personnel. 3. 731 Drilling, furnishing personnel for manning, maintenance and operation of drilling rig and training of personnel. 4. 1722 Furnishing supervisory staff with expertise in operation and management of Drilling unit. 5. 729 Capping including subduing of well, fire fighting. 6. 738 Capping including subduing of well, fire fighting. 7. 1528 Analysis of data to prepare job design, procedure for execution and details r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Repair of gas turbine, gas control system and inspection of gas turbine and generator. 24. 741 Repair and inspection of turbines. 25. 737 Repair, inspection and overhauling of turbines. 26. 736 Inspection, engine performance evaluation, instrument calibration and inspection of far turbines. 27. 1522 Replacement of choke and kill consoles on drilling rigs. 28. 1521 Inspection of gas generators. 29. 1515 Inspection of rigs. 31. 1240 Inspection of existing control system and deputing engineer to attend to any problem arising in the machines. 32. 1529 Inspection of drilling rig and verification of reliability of control systems in the drilling rig. 33. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsideration by setting aside the orders of the High Court passed in each of the cases before it and restoring the view taken by the learned Appellate Commissioner as affirmed by the learned Tribunal. 9. We, therefore, by keeping in view the ratio laid down by the Hon ble Apex Court in the aforesaid referred to case of Oil Natural Gas Ltd. Vs CIT Anr., set aside the impugned order and direct the AO to accept the claim of the assessee that its Revenue is chargeable to tax u/s 44BB of the Act and not u/s 115A of the Act. 10. It is also relevant to point out that in the case of M/s Precision Energy Services Ltd. which was relied by the DRP while deciding the issue against the assessee was subject matter of adjudication before the Hon ble Uttarakhand High Court in ITA No. 75/2014 wherein their lordships in para 4 of the order dated 06.08.2015 held as under: 4. In the light of the judgment of the Hon ble Apex Court in Civil Appeal No. 731 of 2007 and connected cases (Oil Natural Gas Corporation Ltd. Vs Commissioner of Income Tax Another), the substantial questions of law relating to the assessability of the amounts under Section 44BB have to be answered against the ..... 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