TaxTMI 
TaxTMI 
2011 (1) TMI 123
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....akhs towards mobilization fees to cover the cost of moving the drilling rig from Sharjah to Bombay High. The assessee filed its return of income for the assessment year 2000-01 on 24.11.2000 declaring a total income of Rs. 2,76,06,590. In the said return the assessee did not disclose the above receipt of US$1000000 on the ground that no income has accrued in India in respect of this payments. The AO issued notice u/s 142(1) dated 18.10.2002 calling upon the assessee to substantiate its claim as to how the mobilization of rig would not be taxable in India in view of the provisions of section 44AB of the Act. In reply to the said notice the Assessee contended that the mobilization fee accrued to the assessee outside India since it was in respect of mobilizing the rig from outside India to its first location in India. The assessee further contended that as per explanation (1) to section 9(1)(i) of the Act, no income deemed to accrued or arise in India. However, the AO has not accepted the contention of the assessee. The AO was of the view that nowhere in the contract it has been stipulated that the mobilization of the vessel in question would be regarded as services not connected with....
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.... on account of providing the services or facilities in connection with or supplying the plant or machinery on hire to be used for extraction or production of mineral oil shall be treated as profit and gains of such business and chargeable to tax. The learned DR has submitted that when section 44BB has specifically provided the provisions for computation of income in connection with the business of exploration of extraction of the mineral oil then the provisions of section 5 and section 9 are not relevant so far as the income accrued or arises or deemed to be arisen or accrued in India. He has further contended that section 5 of the Act begins with "subject to the provisions of this", therefore, the provisions of section 44BB has the overriding effect over the section 5. As far as the provisions of section 9 of the Income Tax Act is concern, it is a deeming provision regarding the income accrued or arises in India. These provisions are general in nature and applicable to the non-residence-assessee. Whereas the provisions of section 44BB provide ;the deeming provisions specifically for the business of exploration of mineral oil. He has relied upon the order of the AO. 2.4 On the oth....
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....re Ltd. 2010-TII-41 - ITAT-Mum-Intl 2.5 We have considered the rival contentions and relevant record. The AO has reproduced the relevant terms and conditions of the agreement dated 3.12.1998 between the assessee and NEPL in paragraphs 3 and 4 of the assessment order which as under : "The contentions of the assessee are dealt with as under : The assessee has entered into an agreement with Neptune exploration and Industries Ltd. on 3.12.1998. The relevant clauses of the agreement are reproduced as under : "Whereas, the charterer has participated in ONGCL tender No. MRBC/DBG/RIGS/(CH)/05(B)/97/T-780 (hereinafter called "ONGCL tender" for charter hire of jack-up rig. Noble Jimmy Puckett and the charterer has been awarded he contract for jack-up rig "Noble Jimmy Puckett" by ONGCL in line with the aforementioned tender : And whereas, the charterer is duly organized, validly existing and in good standing under the laws of India and the execution, delivery and performance of this charter is within charterer's power and has been duly authorized by all necessary corporate action And whereas, the owner has the type of offshore jack up rig namely, Noble Jimmy Puckett which can be used b....
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.... when the assessee has filed some additional evidence to prove that the rig was taken to Sharjah and then brought back to India. It is clear from the remand report dated 30.7.2004 extracted by the CIT(A) at pages 14, 15 and 16 of the impugned order that after agreement dated 3.12.1998, the rig was taken to Sharjah for repairs. This facts has also not been disputed by the assessee. Therefore, there is no initial mobilization of the rig from outside India. The rig, at the time of agreement was very much in India and at the site itself with NEPL working as per the earlier agreement dated 12.11.1997. As per the terms of the agreement assessee has declared that the Rig is in efficient operating condition and is capable of drilling exploratory, development oil and gas wells and for workover operations, including high angle wells, short drift side track, longdrift side track, drain hole and multilateral hole drilling etc. 2.7 Thus, the rig was not stationed or anchored outside India at the time of agreement and consequently, there was no initial mobilization of the rig for bringing the same at the drilling site. The repairs, maintenance and other improvements work of the equipment is the....