TMI Blog2005 (12) TMI 46X X X X Extracts X X X X X X X X Extracts X X X X ..... e court was delivered by 1 P. C. VERMA J .—This is an appeal under section 260A of the Income-tax Act, 1961, against the judgment and order dated October 29, 1993, passed by the Income-tax Appellate Tribunal, Delhi Bench "D", New Delhi (hereinafter will be referred to as the Tribunal) in I. T. A. No. 2598/D/90 for the assessment year 1985-86, whereby the Tribunal has dismissed the appeal of the Revenue. 2 Brief facts of the case are that ONGC as an agent of M/s. Foramer France (non-resident) submitted a return of income-tax for the assessment year 1985-86 on February 28, 1986, declaring a total income of Rs. 8,34,750 and for the assessment year 1986-87 on December 1, 1986, declaring a total income of Rs. 12,66,980. The Assessing Offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment year 1985-86 at Rs. 1,11,30,010 and for the assessment year 1986-87 at Rs. 1,68,93,120 and the tax at 40 per cent. was charged on the said amount in view of the provisions of section 44D read with section 115A of the Act. Thereafter, the appeal was preferred by the assesses-company before the Commissioner of Income-tax (Appeals). The Commissioner (Appeals) after relying on the judgment of the Income- tax Appellate Tribunal's earlier decision allowed the appeal of the assesses company. Thereafter, the Revenue Department preferred a second appeal before the Income-tax Appellate Tribunal. The Tribunal also dismissed the appeal of the Revenue and held that the contract entered between the ONGC and the assesses-company cannot be termed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of oil and gas offshore India. Therefore, in consideration or the premises and mutual covenants of the parties, it was agreed that: 1. The contract shall commence from December 12, 1 and shall continue November 15, 1984. 2. Clause 2 provides personnel and services to be furnished and daily fees. 3. Clause 2.1 provides that the contractor agrees to provide those expatriate personnel designated in exhibit "A" during operation of the unit for a consideration of US$ 3,450.00 (fees) per day except as they may be I adjusted in accordance with the terms thereof. These rates shall remain during the term of the contract and the contract may be extended by at the same fees, terms and conditions. 4. Clause 2.2 provides for deduction from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s drilling programme. The programme may be amended by owner at any time. All operations shall be performed by con tractor in a diligent, skilful, and workman like manner using sound engineering principle and good oil-field practices and in accordance with the said drilling programme; contractor shall conduct all operations on a full twenty-four (24) hours day, seven (7) day-week basis. 9. In clause 4.8, it has been provided that contractor shall use pre cautions in accordance with good oil-field practices, to drill a hole, which will not deviate from the limits specified by owner for that hole. Measurement of those angles shall be made by contractor by methods acceptable to owner at intervals as may be directed by owner. Owner may furnish ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... GC an agent of the asses- see-company was directed to file an affidavit as to whether there is some other work contract with the assesses-company. The affidavit has been filed by Sri R. K. Gupta, s/o Sri R. C. Gupta posted as Deputy General Manager (F A). The paragraph 4 of the said affidavit is relevant, which is being reproduced hereunder "That under the said agreement, Foramer was required, through its personnel listed in exhibit A to the said agreement, to carry out, inter alia, the drilling operations specified in clauses 4.3 to 4.10 of the said agreement." 7 Thus, it is clear that clauses 4.3 to 4.10 of the contract were to be per formed by the assesses-company through its personnel listed in exhibit A, which has been stated in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... staff to the owner, i.e., the ONGC and the owner was to utilise the services of such expatriate personnel of the contractor for manning, assisting in the operations and management of the rig. It has not been mentioned that these personnel shall also carry out the work of drilling of well. Therefore, the company has received fee for rendering technical services and hence is liable to pay tax under section 44D read with section 115A of the Income-tax Act. 9 For the reasons recorded above, the judgments of the Income-tax Appellate Tribunal as well as the Commissioner (Appeals) are hereby set aside and the judgment of the assessing authority is affirmed. The substantial question of law framed above is answered in favour of the Revenue and a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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