TMI Blog2017 (7) TMI 731X X X X Extracts X X X X X X X X Extracts X X X X ..... as only after the aforesaid fabrication, upgradation and enabling operations were carried out that further drilling operations were commenced from 3.11.2010 and continued till the end of the financial year. Thus, the assessee was having in PE in India to carry on business from the day when it commenced in India operation to fabricate, to upgrade to prepare, to position and to enable the Rig to perform the drilling activity. Hence assessee had deployed the rig in connection with the exploration activity from 26.04.2010. Hence, since service and the operation continued till the end of the financial year, the number of days of the deployment of rig was more than 183 days. Hence assessee had a PE in India. - Decided against assessee. - I.T.A. No. 1387/Mum/2015 - - - Dated:- 19-4-2017 - SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER For The Revenue : Shri M.V. Rajguru-Sr. DR For The Assessee : Shri P.J. Pardiwala/Mathur Agrawal ORDER PER SHAMIM YAHYA, AM: This appeal by the revenue directed against the order of Ld. CIT(A), dated 28.10.2014 and pertains to assessment order 2011-12. The grounds of appeal read as under: - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 with GSPC for provision of offshore drilling services and the drilling rig was brought into India in April 2010. v. The actual services under the contract with GSPC were commenced from03.12.2010 and continued till the end of the financial year. vi. The drilling services were continued for a period of 119 days during the F.Y2010-11. vii. As per Indo-Singapore DTAA the business profits of the Singapore Enterprise can be taxed in India only if it has a PE in India. viii. An Enterprise of Singapore is deemed to have a PE in India and to carry on business through that PE only if the Singapore Enterprise provides services or facilities in India for a period of more than 183 days in any fiscal year in connection with the Exploration, Exploitation or Extraction of mineral oils in India. ix. As the drilling operations in India were only under taken for 119 days which is less Than the threshold period of 183 days, accordingly, the assessee cannot be said to have PE in India. x. In. view of the above, provisions of section 44BB cannot be applied. xi. The revenues for A.Y.2009-10 were offered for taxation u/s. 44BB as the assessee had operations in I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e rig is not equipped with a plea hammer, it will be GSPC‟s responsibility to provide with pile hammer as Aban has stated in its bid that in can be provided at cost of US $ 1800 per day if required by GSPC. e) Aban current has 18 3/4th 15k BOP and it will be used in the beginning. Aban will explore providing either a 20 3K or a 21 2K BOP in addition for short term. f) GSPC asked about the BOP hoisting system since it is rated just above the weight of the BOP stack. Aban responded that they would add extra compression to the system. g) GSPC inquired if Aban is equipped to carry out batch drilling of three wells. Since the CTU is not needed, a Texas Deck would have to be fabricated/modified to support tree conductors. GSPC will furnish the information that GSPC has on the previous design by Premium Drilling. h) GSPC will furnish the 4 slot temple drawings along with the drawings of the existing 6 slot template to Aban. v. From the above facts it is clear that the rig was not lying idle in India, but it was brought in India in April 2010 lo make it suitable for undertaking the drilling48 activities for GSPC. vi. The upgradation activities ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 03.24 2,50,549 Catering CATERING 13015.40 5,81,984 Catering Total Revenue: 14451143.84 64,88,90.227 The Assessing Officer further held that in view of the discussion made in para 7 above it is held that the provisions of section 44BB of the Act are clearly applicable to the assessee and accordingly 10% of the gross revenue of ₹ 64,88,90,227/- received from GSPC is held to be income of the assessee As the assessee has furnished inaccurate particulars of income and concealed the particulars of income. 5. Upon assessee s appeal, Ld. CIT(A) decided the issue in favour of the assessee by placing reliance upon a decision Hon ble Uttarakhand High Court as under :- I have carefully considered the AOs order and appellant AR‟s submissions extracted as above. Having taken note to the same and also to the various judicial pronouncements referred as above by the AO as well as appellant AR‟s submissions, I find that there is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ort from Uttarakhand High Court decision in case of DIT(IT) V. R B Falcon Offshore Ltd. [(2014) 2233 Taxman 266]. Thus, in absence of appellant having any PE in India, I hold that appellant is not liable to tax in India. Accordingly, additions made to the total income of the assessee stands deleted. 6. Against the above order revenue is in appeal before us. We have heard both the counsel and perused the records. Ld. Departmental Representative submitted that ld. CIT(A) has totally erred in relying upon the decision of Hon ble High Court in the case of R and B Falcon Offshore (supra). Ld. D. R. submitted that in that case the structure was ready for use. Hence the Hon ble High Court had held that merely being ready for use cannot be taken in counting the number of days. However, ld. D.R. submitted that in the present case that the drilling rig was being prepared to make it suitable for the drilling activities for GSPC. Hence, ld. D.R. submitted that the upgradation activities and preparation activities of the rig is a part and parcel of the period of the uses of the rig. Hence he pleaded that the order of the assessing officer should be restored. Per contra, ld. Counsel of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ositioning of the rig with the guture platform, GSPC may not be able to provide AHTS during the Rig positioning. c) GSPC will provide the latest platform elevations and plan views to Aban. d) Since GSPC is going to hire casting Running services separately as done earlier and the rig is not equipped with a plea hammer, it will be GSPC‟s responsibility to provide with pile hammer as Aban has stated in its bid that in can be provided at cost of US $ 1800 per day if required by GSPC. e) Aban current has 18 3/4th 15k BOP and it will be used in the beginning. Aban will explore providing either a 20 3K or a 21 2K BOP in addition for short term. f) GSPC asked about the BOP hoisting system since it is rated just above the weight of the BOP stack. Aban responded that they would add extra compression to the system. GSPC inquired if Aban is equipped to carry out batch drilling of three wells. Since the CTU is not needed, a Texas Deck would have to be fabricated/modified to support tree conductors. GSPC will furnish the information that GSPC has on the previous design by Premium Drilling. 8. A reading of the above makes it clear that immediately after arrival of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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