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2014 (3) TMI 172 - ITAT DELHIEstimation of income u/s 44DA or Section 44BB – Production Testing Surface equipment (along with accessories) in operation condition and services - extraction or production of, mineral oils including petroleum and natural gas - fees for technical services - Held that:- The decision in Director of Income-tax-II Versus OHM Ltd. [2012 (12) TMI 422 - DELHI HIGH COURT] followed - The provision of Section 44BB is a special provision while Section 44DA is a general provision - when the services rendered by the assessee fall within the scope of Section 44BB, the said Section would be applicable but, where the services are of the type which do not fall under that Section but are more general in nature, then, Section 44DA would be applicable. The scope of the work of the assessee falls squarely within the ambit of Section 44BB because the first contract is for hiring of production testing surface equipment in operation condition for carrying out production testing of high pressure exploratory and development wells - The second contract is for providing of mud services on service contract to drill 17 nos. of horizontal and multilateral wells - wells were drilled for the purpose of exploration/production of mineral oil - the services provided by the assessee squarely fall within the ambit of Section 44BB(1) – the CIT(A) rightly directed the AO to compute the income u/s 44BB of the Act – Decided against Revenue. Cancelation of penalty u/s 271(1)(c) of the Act – Held that:- This is not a fit case for levy of penalty under Section 271(1)(c) - As per profit & loss account, there was a loss - merely because the income of the assessee is directed to be determined by the deeming provision of Section 44BB, it cannot be said that assessee concealed the income or furnished inaccurate particulars of income - It is nowhere mentioned either in the assessment order or in the penalty order that assessee concealed any fact or any details furnished by the assessee were found to be wrong or false – The decision in CIT Vs. Reliance Petroproducts Pvt.Ltd. [2010 (3) TMI 80 - SUPREME COURT] followed – the CIT(A) rightly cancelled the penalty levied under Section 271(1)(c) – Decided against Revenue.
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