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TMI Blog2016 (1) TMI 134X X X X Extracts X X X X X X X X Extracts X X X X ..... 15A of the Act and not taxable u/s 44BB of the Act. - Decided in favour of assessee X X X X Extracts X X X X X X X X Extracts X X X X ..... long with operating personnel. 4. Facts of the case in brief are that the assessee filed the return of income on 29.07.2006 declaring an income of ₹ 75,23,009/- which was processed u/s 143(1) of the Income Tax Act, 1961 (hereinafter referred to as the Act). Thereafter the notice u/s 148 of the Act dated 31.03.2010 was issued to the assessee, inconsequence to the same a draft assessment order dated 30.12.2010 was passed and issued to the assessee. The AO worked out the total income at ₹ 8,06,65,358/- chargeable to tax as per Section 115A r.w.s. 9(1)(vii) of the Act. Thereafter the assessee filed objection with the Dispute Resolution Panel (DRP). As regards to the rejection of assessee's claim to be taxed u/s 44BB of the Act and in treating the receipts as fee for technical services, the DRP observed that the issue as to whether "Wireline and Slickline" services were covered by Section 44BB of the Ace came up for consideration of the DRP in the case of M/s Precision Energy Services Ltd. for the assessment year 2007-08 wherein the stand taken by the AO that income for providing Wireline services was taxable as fee for technical service and not taxable under Section 44BB o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted in the Panna/Mukta oilfield, from M/s Cairn Energy India Pty Ltd. for the slickline services to be performed in Rajasthan and from M/s Oil & Natural Gas Corporation for the provision of Wireline and Gas Lift Services. The claim of the assessee was that its income was taxable u/s 44BB of the Act. The said claim of the assessee was denied by the AO. 8. Now this issue has been settled by the Hon'ble Apex Court in the case of Oil & Natural Gas Corporation Ltd. Vs CIT & Anr. in Civil Appeal No. 731/2007 vide order dated 01.07.2015. In the said case it has been held as under: "13. The Income Tax Act does not define the expressions "mines" or "minerals". The said expressions are found defined and explained in the Mines Act, 1952 and the Oil Fields (Development and Regulation) Act 1948. While construing the somewhat pari materia expressions appearing in the Mines and Minerals (Development and Regulation) Act 1957 regard must be had to the provisions of Entries 53 and 54 of List I and Entry 22 of List II of the 7th Schedule to the Constitution to understand the exclusion of mineral oils from the definition of minerals in Section 3(a) of the 1957 Act. Regard must also be had to the fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al No. Work covered under the contract 1. 4321 Drilling of exploration wells and carrying out seismic surveys for exploratory drilling. 2. 740 Drilling, furnishing personnel for manning, maintenance and operation of drilling rig and training of personnel. 3. 731 Drilling, furnishing personnel for manning, maintenance and operation of drilling rig and training of personnel. 4. 1722 Furnishing supervisory staff with expertise in operation and management of Drilling unit. 5. 729 Capping including subduing of well, fire fighting. 6. 738 Capping including subduing of well, fire fighting. 7. 1528 Analysis of data to prepare job design, procedure for execution and details regarding monitoring. 8. 1532 Study for selection of enhanced Oil Recovery processes and conceptual design of Pilot Tests. 9. 1520 Engineering and technical support to ONGC in implementation of Cyclic Steam Stimulation in Heavy Oil Wells. 10. 2794 Assessment and processing of seismic data along with engineering and technical support in implementation of Cyclic Steam Stimulation. 11. 1524 Conducting reservoir stimulation studies in association with person ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... System. 42. 1239 To develop technical specification for 3D Seismic API modules of work and to prepare bid packages. 43. 1527 Supply supervision and installation of software which is used for analysis of flow rate of mineral oil to determine reservoir conditions. 44. 1523 Supply, installation and familiarization of software for processing seismic data. The above facts would indicate that the pith and substance of each of the contracts/agreements is inextricably connected with prospecting, extraction or production of mineral oil. The dominant purpose of each of such agreement is for prospecting, extraction or production of mineral oils though there may be certain ancillary works contemplated thereunder. If that be so, we will have no hesitation in holding that the payments made by ONGC and received by the nonresident assessees or foreign companies under the said contracts is more appropriately assessable under the provisions of Section 44BB and not Section 44D of the Act. On the basis of the said conclusion reached by us, we allow the appeals under consideration by setting aside the orders of the High Court passed in each of the cases before it and restoring the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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