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TMI Blog2023 (2) TMI 1240X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. For the sake of convenience, the relevant part of the order dated 30.01.2023 is set forth hereafter: "3. The issue which arises for consideration is: whether the amounts received by the respondent/assessee from M/s Reliance India Ltd. (RIL) should be considered as Fees for Technical Services (FTS) and hence exigible to tax under Section 44DA and Section 115Aof the Income Tax Act, 1961 [in short, "the Act"]? 4. According to the Assessing Officer (AO), since the payment received is qua FTS, it will fall under Section 9(1)(vii) of the Act and is also covered by the provisions of Article 13 of the India-France Double Taxation Avoidance Agreement (DTAA). 5. To be noted, the record shows that the respondent/assessee does not have a Perm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvices" means any consideration (including any lump sum consideration) for the rendering of any managerial, technical or consultancy services (including the provision of services of technical or other personnel) but does not include consideration for any construction, assembly, mining or like project undertaken by the recipient or consideration which would be income of the recipient chargeable under the head "Salaries". 5. One of the points in issue before the Income Tax Appellate Tribunal [in short "Tribunal"] and before this Court was, whether the activities carried out by the respondent/assessee fall within the exclusionary part of Explanation 2 i.e., whether or not the activity was in the nature of mining or like project. 6. It is com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be used in the prospecting for or extraction or production of mineral oils would be taxable at the rate of 10% of the aggregate amount as specified in sub-section (2). Off course, the proviso to sub-section (1) of section 44BB carves out an exception by providing that the provision would not apply in a case where provision of section 42 or section 44D or section 44DA or section 115A or section 293A would apply for computing profits and gains of the business. In the facts of the present case, admittedly, entire case of the Revenue is, assessee's income is to be computed under section 44DA. However, we have already held that the amount received not being in the nature of royalty or FTS, section 44DA would not apply. 23. Reverting back to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nspection and overhauling of turbines, expert advice on the device to clean inside of a pipeline, feasibility study of rig to assess its remaining useful life and to carry out structural alteration, etc. were found to be in connection with prospecting for or exploration or extraction of mineral oils. The Hon'ble Supreme Court, while taking note of the nature of work to be executed under the contract, has observed that the pith and substance of the contract is inextricably connected with prospecting for or extraction or production of mineral oil. Thus, the amount received falls under section 44BB(1) of the Act. The aforesaid observations of Hon'ble Supreme Court would squarely apply to the facts of the present appeal, as, the work performed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tribunal, in the impugned judgment, while holding in favour of the respondent/assessee, has relied upon its order dated 17.12.2018 rendered in DCIT v. Technip UK Limited. This order was passed in ITA No.1116/Del/2014.
17. Mr Ruchir Bhatia, who appears on behalf of the appellant/revenue, says that he will ascertain, as to whether any appeal was lodged with this Court qua the Tribunal's order dated 17.12.2018.
18. Issue notice.
18.1 Mr Aniket D. Agrawal accepts notice on behalf of the respondent/assessee.
19. Learned counsel for the parties say, that they will file written submissions, not exceeding three pages each, at least five days before the next date of hearing.
20. List the matter on 16.08.2023. X X X X Extracts X X X X X X X X Extracts X X X X
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