TMI Blog2013 (11) TMI 1683X X X X Extracts X X X X X X X X Extracts X X X X ..... or the Assessee : Hiro Rai ORDER N. K. Billaiya (Accountant Member) These two appeals filed by the Revenue pertaining to two different assessees are directed against the two separate orders of the Ld. CIT(A)XXXI, Mumbai pertaining to A.Y. 2005-06. As common issues are involved in both these appeals, they were heard together and disposed of by this common order for the sake of convenience and brevity. ITA No. 700/Mum/2009 2. The Revenue has raised 3 substantive grounds of appeal which read as under: 1. On the facts and in the circumstances of the case and in law, the Id. CIT (A) erred in directing the assessing officer to assess the total receipts of ₹ 16,22,01,626/- under section 44BB of the IT Act, 1961 holding that (i) where the consideration for composite contract containing various terms of work at various stages of completion cannot be apportioned in part and therefore, the total consideration of such indivisible contract has to be held as income within the meaning of section 44BB of the Act. (ii) the consideration paid for a project involving installation, assembly or the like would be the price paid for such project and cannot be te ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wever, the AO was of the opinion that considering the various clauses of the agreement relating to the scope of services rendered by the assessee, the assessee is also providing technical services. The AO further observed that the claim of deduction for mobilization, demobilization expenses by the assessee is not tenable in law as per the recent decision of the Hon ble Uttarkhand High Court in the case of Sedco Forex International INC Vs CIT in ITA No. 99 of 1999 new No. 434 of 2001. The AO went on to compute the income by bifurcating the total payments received by the assessee under two heads (a) deemed income u/s. 44BB at the rate of 10% of ₹ 12,97,61,300/- computed the taxable income under this head as ₹ 12,97,61,30/- and (b) fees for technical services ₹ 14,43,42,885/-. 4. The assessee strongly agitated this action of the AO before the Ld. CIT(A). It was strongly contended before the Ld. CIT(A) that the assessee company, resident of UAE was entitled to be governed by the provisions of DTAA and revenue earned were offered for tax under Article-5 of the DTAA. Under Article-7 of the DTAA, the business profits of the assessee could be taxed in India only if it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed as per provisions of Sec. 44BB of the Act and the balance receipt is also to be assessed u/s. 44BB of the Act. 5. Aggrieved by this, Revenue is before us. 6. The Ld. Departmental Representative strongly supported the findings of the AO. The Ld. DR drew our attention to the scope of work as provided in the sub-contract work between Engineers India Ltd and the assessee. It is the say of the Ld. DR that work as provided under clause (i) a,b,c,d,e onwards is nothing but providing of technical services and therefore the AO has rightly treated part of the payment as fee for technical services. It is the say of the Ld. DR that provisions of Sec. 9(1)(vii) would prevail over section 44BB of the Act. 7. Per contra, the Ld. Counsel for the assessee strongly supported the findings of the Ld. CIT(A) and filed a paper book of decisions relied upon by him which contains decisions of the co-ordinate benches of the Tribunal as exhibited from page-1 to 37 of the paper book. Pointing out to the decision of the Hon ble Delhi High Court in the case of Jindal Drilling and Industries Ltd. 320 ITR 104, the Ld. Counsel for the assessee submitted that in this case, the Hon ble Delhi High Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e used, in the prospecting for, or extraction or production of, mineral oils in India; and (b) the amount received or deemed to be received in India by or on behalf of the assessee on account of the provision of services and facilities in connection with, or supply of plant and machinery on hire used, or to be used, in the prospecting for, or extraction or production of, mineral oils outside India. 84 [(3) Notwithstanding anything contained in sub-section (1), an assessee may claim lower profits and gains than the profits and gains specified in that sub-section, if he keeps and maintains such books of account and other documents as required under sub-section (2) of section 44AA and gets his accounts audited and furnishes a report of such audit as required under section 44AB, and thereupon the Assessing Officer shall proceed to make an assessment of the total income or loss of the assessee under subsection (3) of section 143 and determine the sum payable by, or refundable to, the assessee.] Explanation.-For the purposes of this section,- (i) plant includes ships, aircraft, vehicles, drilling units, scientific apparatus and equipment, used for the purposes of th ..... 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