TMI Blog2019 (3) TMI 1030X X X X Extracts X X X X X X X X Extracts X X X X ..... er the provisions of Sec. 44BB of the I.T Act. We thus finding ourselves to be in agreement with the view therein taken by the Tribunal, are thus of the considered view that the assessee during the year under consideration had rightly offered the amount for tax under Sec. 44BB of the I.T Act. In the backdrop of our aforesaid observations the order passed by the A.O under Sec. 143(3) r.w.s. 144C(13) is set aside. - Decided in favour of assessee. - I.T.A. No. 1422/Mum/2018 - - - Dated:- 15-3-2019 - Shri M. Balaganesh, AM And Shri Ravish Sood, JM For the Appellant : Sh. R.V. Shah Ms. Mallika Devendra, A.Rs. For the Respondent : Sh. V. Srikar, D.R ORDER PER RAVISH SOOD, JUDICIAL MEMBER The present appeal filed by the assessee is directed against the order passed by the Assessing Officer (for short A.O ) under Sec. 143(3) r.w.s 144C(13), dated. 16.05.2017, wherein the latter had given effect to the directions given by the Dispute Resolution Panel-2, Mumbai (for short DRP ), vide its order dated 31.03.2017, which in itself was passed pursuant to the objections filed by the assessee to the additions/variations made by the A.O in his draft assessment order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made accordingly by B J Services. Thus the order is non-est factum and deserves to be deleted. 7. Without Prejudice to the above, Appellant submits that agreement of B.J. Services with the appellant was produced before the DRP as well as the Assessing Officer for the work performed by the Appellant along with the term and conditions of the agreement with the B.J. Services, in spite of verifying the agreement in entirety, the Assessing Officer held that the appellant had rendered the services to ONGC. Therefore, the order passed is not based on correct appreciation of law and facts. 8. Without Prejudice to the above, Assessing Officer has overlooked that section 115A is applicable only when income for technical fees is received from Government or an Indian concern. In the Appellant company's case, income is not received from an Indian Concern nor from the Government Appellant assessee therefore prays that provisions of section 115A are not applicable. 9. Without Prejudice to the above, Assessing Officer has not considered the decision of the Supreme Court in the case of Oil and Natural Gas Corporation Ltd. v. CIT (2015) 59 Taxman.com 1 (SC) though the same wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ervices were technical services that were provided by the assessee for prospecting extraction or production of mineral oil. The A.O observed that the certificates issued under Sec. 197 clearly provided for deduction of tax at source @10%/15% on the gross amount payable by B.J Services Company (Middle East ) Ltd. to the assessee in respect of fees for professional/technical services. 4. In the backdrop of the aforesaid facts, the A.O called upon the assessee to show cause as to why the amount of ₹ 3,02,40,747/- received from B.J Services Company (Middle East ) Ltd may not be treated as fees for technical services and brought to tax as per the provisions of Sec. 115A of the I.T Act. The assessee submitted before the A.O that the provisions of Sec. 44BB were clearly applicable in its case. However, the A.O after deliberating on the explanation of the assessee did not find favour with the same. The A.O primarily driven by the facts viz. (i). that as B.J Services Company (Middle East ) Ltd was carrying out Fracturing Flow Back Services and various operations at the Oil rigs pursuant to a contract with ONGC, therefore, the assessee who was sub-contracted the said work was indire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n application dated 12.02.2019, therein praying that the delay involved in filing of the appeal may be condoned. It is the claim of the assessee that the aforesaid delay had occurred due inadvertent omission on the part of its chartered accountant who had forgotten to file the appeal within the stipulated time period. The assessee explaining the reasons leading to the delay on the part of the chartered accountant had stated that as at the relevant point of time he was pre-occupied and engrossed with carrying out compliance of the new law of GST which had came into force on 01.07.2017, as well as filing of the returns of income of the non corporate assessees which were supposed to be filed latest by 31.07.2017, therefore, for the said reason the aforesaid delay in filing of the appeal had occasioned on his part. In order to fortify its bonafides, it is stated by the assessee that involving identical facts the appeal for the preceding year i.e. AY. 2011-12 filed by the assessee had been heard by the Tribunal on 14.08.2017. In sum and substance, it is stated by the assessee that the delay involved in filing of the present appeal had occurred because of bonafide reasons and not for any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the orders of the Tribunal in the assessee s own case for the preceding years i.e A.Y 2011-12, A.Y 2012- 13 and A.Y 2013-14 (copies placed on record). It was submitted by the ld. A.R that the Tribunal in the aforementioned cases for the preceding years, had after deliberating at length on the amounts received by the assessee from B.J Services Company (Middle East) Ltd. for rendering of Fracturing Flow Back Services in connection with extraction or production of mineral oil, had concluded that the same was liable to be taxed as per the provisions of Sec. 44BB of the I.T Act. It was submitted by the ld. A.R that the Tribunal in its aforesaid order had held that the provisions of Sec. 115A and Sec. 44DA would not be applicable to the case of the assessee. The ld. Departmental Representative (for short D.R ) fairly conceded to the factual position as was so averred by the counsel for the assessee and admitted that th issue was covered against the revenue . 10. We have heard the authorized representatives for both the parties, perused the orders of the lower authorities and the material available on record. Our indulgence in the present case has been sought to adjudicate as to whet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded to be in agreement with the ld. A.R that as the contents of the aforesaid contract clearly stated that if any Sub-contractor was engaged by the contractor for performing the contract, then he shall be under the complete control of the contractor and there shall be no contractual relationship between any such Sub-contractor and the company, viz. ONGC. We thus, are of the considered view that in the backdrop of the aforesaid clear terms of the contract, now when the assessee who was engaged as a Sub-contractor by B.J Services Company (Middle East) Ltd had nothing to do with the company, viz. ONGC, therefore, the A.O/DRP were wrong in concluding that the amount received by the assessee from B.J Services Company (Middle East) Ltd for rendering Fracturing Flow Back Services were indirectly received from ONGC. We thus set aside the aforesaid observations of the A.O/DRP and hold that the amount under consideration was received by the assessee from B.J Services Company (Middle East) Ltd. 10. We further find that pursuant to the judgment of the Hon‟ble Supreme Court in the case of ONGC Vs. CIT (2015) 376 ITR 306 (SC), it stands settled as on date that prospecting for extracti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oil from the Government or an Indian concern, therefore, hold that the applicability of the provisions of Sec. 115A and Sec. 44DA to the facts of the case of the present assessee would stand excluded. 11. We thus, in the backdrop of our aforesaid observations set aside the order of the A.O assessing the amount of ₹ 2,65,46,753/- received by the assessee from B.J Services Company (Middle East) Ltd. for rendering of Fracturing Flow Back Services at the oil rigs to tax as per the provisions of Sec. 115A of the Act‟. We are persuaded to be in agreement with the ld. A.R that now when Sec. 44BB contemplates special and specific provisions for computing profits and gains of a non-resident in connection with the business of providing services or facilities in connection with or supplying plant and machinery on hire used or to be used in the prospecting for or extraction or production of mineral oils, therefore, the Fracturing Flow Back Services rendered by the assessee in connection with extraction or production of mineral oil would squarely be covered by the provisions of Sec. 44BB. We thus, set aside the order of the A.O and direct him to assess the amount of amount of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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