TMI Blog2023 (2) TMI 1240X X X X Extracts X X X X X X X X Extracts X X X X ..... by the respondent/assessee is in the nature of FTS. Whether the amount received by the respondent/assessee, in relation to which, concededly, tax has been paid on a presumptive rate under Section 44BB? - It is the appellant/revenue s case, that since the respondent/assessee, concededly, was a second line contractor, Section 44BB of the Act would not apply to it. To be noted, there is no such distinction made in Section 44BB of the Act with regard to a main or a second line contractor. All that the recipient of income has to demonstrate, is that it is a non-resident who is engaged in 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.This is again, in our view, a finding of fact which cannot be disturbed, unless it is held to be perverse. Once again, no question of law has been proposed by the appellant/revenue, to the effect that the finding of fact is perverse. Whether Section 44BB of the Act would be applicable to the respondent/assessee, who is a second line contractor? - Although, prima facie, as noted above, there is n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cord shows that the respondent/assessee does not have a Permanent Establishment (PE) in India. 5.1. Furthermore, it is the respondent/assessee s case that the activity in issue is connected with prospecting and extraction of mineral oil, and therefore, would fall under Section 44BB of the Act. 5.2. The respondent/assessee, accordingly, it appears, has offered the amount received against the activity for levy of tax under Section 44BB of the Act and appears to have relied upon the following judgments: (i) ONGC Ltd. v. Commissioner of Income Tax 376 ITR 306; (ii) DIT v. OHM Limited (2013) 352 ITR 406 (Delhi) 6. According to the appellant/revenue, the respondent/assessee is the second line contractor. The Tribunal, in this behalf, while ruling in favour of the respondent/assessee, has relied upon its decision rendered in the matter concerning the respondent/assessee. 7. The appellant/revenue will inform the court as to what was the final outcome of that decision taken by the Tribunal. 8. To be noted, Mr Aniket D. Agrawal enters appearance on behalf of the respondent/assessee. Mr Garg will ensure that a copy of the case papers is served on Mr Agrawal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on by the assessee falls within the expression mining or like projects , it goes out of the purview of FTS as defined under Explanation 2 to section 9(1)(vii) of the Act. That being the factual and legal position, the amount received by the assessee cannot be treated as FTS under section 9(1)(vii) of the Act. That being the case, the provision of the Act being more beneficial in such a scenario, as per section 90(2) of the Act, will be applicable. Therefore, there is no need for us to examine the applicability of the term FTS‟ under India France Tax Treaty. Thus, once the amount received by the assessee does not fall within the definition of FTS under section 9(1)(vii) of the Act, by default, section 44DD would not apply to such payment. 8. There is no question of law proposed by the appellant/revenue, that this finding of fact is perverse. Therefore, in our view, we are not inclined to frame any question(s) of law, with regard to whether or not the income received by the respondent/assessee is in the nature of FTS. 9. The other issue which has arisen is: whether the amount received by the respondent/assessee, in relation to which, concededly, tax has been paid on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the services provided by the assessee under the contract with RIL are in connection with prospecting for or extraction or production of mineral oils. The expression in connection with being of widest amplitude cannot be given a restrictive meaning. The expression would also encompass services or facilities provided to a person who is engaged in exploration or production of mineral oils. Going by the plain meaning of the words as used in the aforesaid provision, it cannot be said that for claiming benefit under section 44BB, a non-resident entity providing services in connection with exploration or production of mineral oils must itself be engaged in such activities. xxx xxx xxx 26. From the details of works covered under the contract enumerated in the aforesaid observations of the Hon ble Supreme Court, it can be well appreciated that wide spectrum of services in the nature of analysis of data of wells to prepare a job design, review of sub-surface well data, providing repair plan of wells and supervise repairs, repair of gas turbine, gas control system and inspection of gas turbine and generator, repair and inspection of turbines, repair, inspection and overhauling o ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
