9911796707
TMI Blog1995 (6) TMI 43X X X X Extracts X X X X X X X X Extracts X X X X ..... elevant assessment year, assessee executed contract for OIL AND NATURAL GAS COMMISSION (ONGC), and CHEVRON OIL COMPANY OF INDIA LTD. The income was offered for taxation on the basis of the following statement of contract revenues : Contract No. US $ 1. BOP/SP-PDN/SCON-OPS/30/82 154,890 2. BOP/STR/IMP/GEOL/3/83/B-130 551,662 3. BOP/SP/SCON-OPS/PTS-WLS-CS/KGC(WB)/83-84 505,418 4. GO-277 S06425 168,489 5. BOP-SP-PDN/SCN-OPS/T-II/85-86 101,638 --------- 14,82,097 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lear mandate is given in the section as to the charge of receipts. These are to be taxed on accrual basis. The question, therefore, apropos the choice of method does not arise. Reference was made to the Hevdon's Rule to find out the intention of the Legislature in bringing out section 44C. In explaining the meaning of the word "or" as appeared in sub-section 2(a) of section 44BB, our attention was invited on pages 232-234 of Maxwellon Interpretation of Statutes. 5. Sri. B.K. Khare, learned counsel for the assessee appeared before us. It was stated that the assessee in the preceding years followed cash system of accounting. This cannot be disturbed. There is no stipulation in section 44BB that the assessee must declare the income on accr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of accounting ? Section 44BB prescribes a special provision for the computation of income of non-resident derived from the business of exploration, etc., of mineral oils. This section was inserted by the Finance Act, 1986 (11 of 1987) with retrospective effect from 1st April, 1983. This reads as under : "44BB. (1) Notwithstanding anything to the contrary contained sections 28 to 41 and sections 43 and 43A, in the case of an assessee being a non-resident, engaged in the business of providing services or facilities in connection with, or supplying plant and machinery on hire used, or to be used in the prospecting for, or extraction or production of, mineral oils, a sum equal to ten per cent of the aggregate of the amounts specified in sub-s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nstruction as shall suppress mischief and advance the remedy." 9. Testing the section on the touchstone of Heydon's Rule, we find that prior to the insertion of section 44BB good many complications were involved in the computation of the taxable income of a non-resident taxpayer engaged in the business of providing services and facilities in connection with or supply of plant and machinery on hire, used or to be used in the exploration and exploitation of mineral oils. Due to the complicated and cumbersome procedure for the computation of the taxable income, the interest of revenue suffered. As a measure of simplification section 44BB was inserted in the Income-tax Act, providing for determination of income of such tax-payer at 10 per c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relation to the assessment year 1983-84 and subsequent years." [165 ITR (St,) 161-162] 10. We further quote from the Financial Bill, 1987 : Notes on clauses : "Clause 11 seeks to insert a new section 44BB in the Income-tax Act. Under the proposed provisions, the income of an assessee engaged in the business of providing services and facilities in connection with, or supplying plant and machinery on hire used or to be used in, the exploration for and exploitation of mineral oils will be determined at 10 per cent of the aggregate certain amounts. The amounts in respect of which the provision will apply would be the amounts paid or payable to the assessee or to any person on his behalf whether in or out of India, on account of the prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ooks of account no question arises in regard to the choice of methods. Section 145 is, therefore, not relevant for deciding the case of the assessee. 13. Section 44BB begins with a non obstante clause. Sub-section (2)(a) of section 44BB deals with the amount paid or payable to the assessee. The language of the section indicates that receipts are to be taxed on the accrual basis. This section was inserted by the Finance Act, 1987. It is a piece of retroactive legislation and effect was given from 1-4-1983. Therefore, during the relevant assessment year mandate of section is to be followed. As per the section, the sum equal to 10 per cent of the aggregate of the amounts specified in sub-section (2) shall be deemed to be profits and gains of ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
