Section 44BB applies to mineral oil contract services closely connected with extraction operations, excluding the general technical services regime.

Contractual services rendered by a non-resident in connection with mineral oil operations were treated as falling within the special presumptive regime under Section 44BB of the Income-tax Act, because the contract terms were closely linked to the underlying mineral oil activity and answered the expression "in connection with" that provision. The more general characterisation as fees for technical services under Section 9(1)(vii) read with Section 44DA was rejected. The reasoning applied the principle that a special provision prevails over a general one, while both must be construed harmoniously so neither becomes otiose. The Revenue's challenge therefore failed, and the receipts were taxable under Section 44BB.

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Issues: Whether the consideration received by the non-resident assessee for the contractual work in connection with mineral oil operations fell within Section 44BB of the Income-tax Act, 1961, and not within the regime of fees for technical services under Section 9(1)(vii) read with Section 44DA of the Income-tax Act, 1961.

Analysis: The contract was held to be the governing document and its terms were found to be closely connected with the underlying mineral oil activity. The services rendered were treated as falling within the expression "in connection with" in Section 44BB. The earlier authoritative decisions were applied to hold that Section 44BB is a special provision for non-residents engaged in services or facilities connected with prospecting for, or extraction or production of, mineral oils, whereas Section 44DA is of a more general character. The reasoning proceeded on the basis that a special provision excludes the general provision and that both provisions must be construed harmoniously so that neither is rendered otiose.

Conclusion: The receipts were held to be taxable under Section 44BB and not as fees for technical services under Section 9(1)(vii) read with Section 44DA; the appeal by the Revenue failed.

Final Conclusion: The decision affirms that contractually connected services for mineral oil operations are governed by the special presumptive regime under Section 44BB, and the Revenue's challenge to the assessee's treatment of the receipts was rejected.

Ratio Decidendi: Where the contractual services are inextricably connected with mineral oil operations, Section 44BB applies as the special and specific charging/computation provision, excluding the more general treatment under Section 44DA and Section 9(1)(vii).

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