9911796707
TMI Blog2011 (5) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... close its doors to an applicant who desires to know which part of its income accrues or arises in India and how much - The applicant can exercise its rights provided it opts to get the income computed under section 44BB(3) of the Act - The scheme of computation of income under this section does not provide any leeway to apply simultaneously both the sub-sections (1) and (3) of section 44BB to the income arising from the business activities falling under the ambit of sect ion 44BB(1) of the Act. seismic data acquisition and processing contracts - If a part of the income falls under "Royalties or Fees for Technical Services", there is no scope to assess such receipts under these heads, once it is held that the income is from its oil explora ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies for mineral oil and falls under the ambit of section 44BB of the Income-tax Act, 1961(Act). The applicant further states that for the purposes of conducting seismic surveys, the vessel is mobilized from outside India to the site area in India where the work is to be carried out. Similarly, when the vessel is demobilized, after completion of the work, it involves moving out of equipment and personnel from the site area. The applicant is paid for mobilization as well as demobilization of its vessel from the site area. In its view, the mobilization/demobilization revenues taxable in India should be restricted only to the revenues attributable to the distance travelled in the Indian territorial waters as compared to the total distance trave ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if the applicant goes out of the purview of section 9(1)(vii) of the Act read with Explanation 2 thereof. 4. The issue had arisen in the case of Geofizyka Torun Sp.zo.o, in AAR/813 of 2009, wherein this Authority after a detailed discussion held the view that: If the business is of the specific nature envisaged under 44BB, the computation provision therein would prevail over the computation provision in section 44DA. In other words the income received by a nonresident businessman for the technical services provided in relation to prospecting and extraction of mineral oil, will be governed by S.44BB for the purposes of computation. If all the services that are in the nature of technical services within the meaning of Explanation 2 to s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s or arises in India or is deemed to accrue or arise in India. Thereafter, under Explanation to section 9(1)(i), income of the business in which all the operations are not carried out in India, only such part of income as is reasonably attributable to the operations carried out in India would be the income deemed to accrue or arise in India. Applying the above stated law the applicant is of the view that any receipt can be subjected to tax under section 44BB only if it is chargeable to tax under the Act. Drawing our attention to the discussion that took place in the course of hearing, the learned Advocate stated that the following issues came up before the Authority: 1. Whether section 44 BB of Income Tax Act, 1961 ( Act) overrides charg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome accrues or arises in India and how much. The applicant can exercise its rights provided it opts to get the income computed under section 44BB(3) of the Act. The scheme of computation of income under this section does not provide any leeway to apply simultaneously both the sub-sections (1) and (3) of section 44BB to the income arising from the business activities falling under the ambit of sect ion 44BB(1) of the Act. It even goes to the extent that if a part of the income falls under "Royalties or Fees for Technical Services", there is no scope to assess such receipts under these heads, once it is held that the income is from its oil exploration and production activities as envisaged under section 44BB. We are of the view that if th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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