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TMI Blog2015 (12) TMI 459X X X X Extracts X X X X X X X X Extracts X X X X ..... after referred as the Act ), sought to set aside the impugned order dated 08.11.2012 passed by Ld. CIT(A) II, Dehradun for the Assessment Year 2009-10 on the grounds inter alia that: 1. Whether on the facts and circumstances of the case, the CIT(A) has erred in holding that the provisions of well testing equipments and services was not in the nature of FTS squarely covered under section 9(1)(vii) of the I.T. Act, 1961. 2. Whether the CIT(A) has erred in holding that the income of the assessee was taxable under the provision of section 44BB even though the nature of services rendered by the assessee were technical in nature and has not adjudicated the aspect of eligibility in terms of second limb of the exclusionary proviso i.e. for a project undertaken by the recipient as confirmed in Delhi High Court Decision in Rio Tinto. 3. Whether on the facts and circumstances of the case, the CIT(A) has erred in holding that the income of the assessee was taxable under the presumptive provisions of see 44BB and ignoring the fact that taxability U/S 44BB shall not apply in respect of income referred to in section 44DA in view of the clarificatory proviso to see 44BB and see ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income in the nature of royalties and FTS where these are effectively connected with a PE, then if a special provision is made respecting a certain matter that matter is excluded from the general provision under the rule of Generallia specialibus non derogant . 11. Whether on the facts and circumstances of the case, the CIT(A) has erred in appreciating the fact that proviso to section 44DA brought about by the Finance Act 2011 was only clarificatory in nature and its application has to be read into the main provisions with effect from the time the main provision came in to effect in view of the decision of the Hon'ble Supreme Court in the case of Sedco Forex International Drilling vs. CIT. 12. Whether the facts and circumstances of the case the CIT(A) has erred in holding that interest U/S 234B was not chargeable in this case by relying upon the decision of / Hon'ble Uttarakhand High Court in t he case of Maersk (334 ITR 79) where as the department has contested the issue and has filed SLP before the APEX Court against in the case of Jacobs Civil incorporated / Mitsubishi involving similar issue. 3. The appellant M/s. Expro Gulf Ltd.., by filing the cros ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ₹ 9,47,23,889/-, and has computed income by applying deemed profit rate of 10% u/s 44BB of the Act. Out of the aforesaid contract, three contracts namely BG Exploration and Production India Ltd; Cairn Energy India Pty. Ltd. and Jubilant Oil and Gas Pvt. Ltd. are production sharing contracts and as such falling in first leg contract with company engaged directly in oil exploration. 6. During the year under assessment the assessee has also executed contract of hire of offshore supply vessel with M/s. Haliburton Offshore Services Inc. which is not a production sharing contract company, thus it is a second leg contract. 7. From the terms and conditions of contact it is clear that the assessee is providing well testing equipment and services through wire line testing, surface testing etc. using a full slim hole DST string or with a production test incorporation a wire line retrievable down hole shut in tool. Thus, the service provided under all the three contracts relate to well testing by weenie of similar procedures. So, in view of the above procedure, the issue of taxability has been determined to be taxed as FTS and confirmed to be so in the case of Precision Energy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the order of DRP; passed draft assessment order dated 09.12.2011 in terms of the provisions contained u/s 144C by observing that the assessee is not entitled for concessional benefit u/s 44BB of the Act. Since, no objection has been filed by the assessee to the draft order and the total income of the assessee was assessed at ₹ 2,36,80,970/-. 14. Undisputedly, the assessee s own case qua the Assessment Years 2008-09 and 2010-11 has been decided by ITAT Delhi Bench B , New Delhi vide order dated 12.02.2015. Ld. A.R. vehemently contended that the present case is covered by the order passed by the Tribunal in assessee s own case in I.T.A.No.5561/Del/2011 and 4650/Del/2014 (supra). For ready reference, the submissions of the Revenue in respect of provisions of Section 44BB and its non applicability to the case in hand are extracted as under: Rule is that where the main provision is clear, its effect cannot be cut down by the proviso. But where it is not clear, the proviso, which cannot be presumed to be a surplus age, can properly be looked into, to ascertain the meaning and scope of the main provision. In support of the above proposition, reliance is placed on the decis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as can be seen from the statement of the case referred for the opinion of learned Attorney General and the opinion of Learned AG. From the context of this instruction, it can be seen that the same would not be applicable to the facts of the case of those applicants who are engaged in the carrying out seismic surveys as the instruction would apply only to those who are engaged in the drilling operations. The services provided by such applicants would not come within the exclusionary part of the Explanation (2) to Section 9 (1) (vii) of the Act as no mining or like project is undertaken by such applicants 5. Section 44D has been made inoperative in respect of agreements after the 3151 Day of March 2003 and with this two streams for taxation of persons engaged in providing services of technical nature is evident, one for those having a PE in India (Section 44DA) and the other who do not have a PE [Section 9 (1) (vii) read with section 115A]. 6. Board's Circular No 649 dated 31-3-1993 also clarifies what situation would govern the aspect of taxability of fee for technical services where there is a treaty existent and where there is none. In view of the above, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee had a PE in India during the relevant period, it is argued that this has to be looked into. This argument in our view has no merit for the reason that, the admitted position is that the assessee has a PE in India. An ROI was filed and assessment was framed on that basis. 13. The DRP had followed its own order in the case of M/s. Precision Energy Services Ltd. For Assessment Year 2007-08 and held that the income in question is taxable as FTS u/s 9(1)(vi) of the Act. The ITAT, Delhi Bench reversed this order of the DRP in the case of Precisions Energy Services Ltd. of assessment year 2007-08 in I.T.A. No. 5286/Del/2010 and held that under the fact and circumstances of the case, the income is taxable u/s 44BB of the Act. The reason is that the scope of work as per the contracts requires, the assessee to provide a rig based surface well, testing equipment along with operating personnel. Thus the order of the DRP in the case of M/s. Precision Energy Services Ltd. is no more a good law. Hence, we have reversed this impugned order of the DRP. 19. Hon'ble High Court of Uttarakhand in I.T.A. No. 35 of 2015 in assessee s own case by following the judgement of Hon& ..... X X X X Extracts X X X X X X X X Extracts X X X X
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