TaxTMI 
TaxTMI 
2007 (9) TMI 196
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....t appears from the perusal of the prayer made in the memo of appeal that only one appeal has been filed to set aside the composite judgment dated March 23, 1999, passed by the Income-tax Appellate Tribunal for the two assessment years, i.e., 1986-87 and 1987-88. No number of another appeal was given by learned counsel for the appellant at the time of hearing. 3. The appellant is a non-resident company entered into agreement with the ONGC, India, for drilling contract between the ONGC and Sedco Forex, which is referred to in the contract as "operator" and the assessee referred to in the contract as "contractor". The assessee was assessed by the Assessing Officer for the assessment year 1986-87 on amount of Rs. 99,04,000 and for the assessment year 1987-88 on Rs. 64,64,530 under section 44BB of the Income-tax Act, which included the mobilization charges in the relevant assessment years. 4. Against the order of the Assessing Officer, the assessee filed appeals for the relevant assessment years on the one and same ground that mobilization charges were not actually charges but were expenses in nature which was reimbursed by the ONGC to the assessee towards the mobilization of the ....
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....ideration mentioned in the agreement for transportation of the drilling unit /rig from their present location to the designated location in India will be excluded from the aggregate amount of gross receipts on which 10 per cent. profit rate is required to be applied. ONGC has made the entire payment including the mobilization fee, operating charges, daily hire on non-operating days, etc., for availing of the services and facilities and the supply of plant and machinery on hire agreed to be provided by the appellant-company to ONGC. The mobilization fee paid by ONGC to the appellant-company has no nexus with the actual amount incurred by the appellant-company for transportation of the drilling unit/rigs to the specified drilling location in India. Even if the actual expenditure incurred by the appellant-company would have been substantially less, ONGC was liable to pay the fixed amount of mobilization fee stipulated in the respective agreements." 7. Accordingly, on the basis of the aforesaid finding the Tribunal rejected the appeal of the assessee vide order dated March 23, 1999, and confirmed the order of the Commissioner of Income-tax (Appeals). 8. The question o....
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.... specified in sub-section (2) shall be deemed to be the profits and gains of such business chargeable to tax under the head 'Profits and gains of business or profession' Provided that this sub-section shall not apply in a case where the provisions of section 42 or section 44D or section 115A or section 293A apply for the purposes of computing profits or gains or any other income referred to in those sections. (2) The amounts referred to in sub-section (1) shall be the following namely (a) the amount paid or payable (whether in or out of India) to the assessee or to any person on his behalf on account of the provision of services and facilities in connection with, or supply of plant and machinery on hire used, or to be used, in the prospecting for, or extraction or production of, mineral oils in India ; and (b) the amount received or deemed to be received in India by or on behalf of the assessee on account of the provision of services and facilities in connection with, or supply of plant and machinery on hire used, or to be used, in the prospecting for, or extraction or production of, mineral oils outside India. (3) Notwithstanding anything contained in sub-section (1....
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.... Mills Ltd. [1968] 67 ITR 79 (SC); (6) Anglo-French Textile Co. Ltd. v. CIT [1954] 25 ITR 27 (SC); (7) Hukam Chand Mills Ltd. v. CIT [1976] 103 ITR 548 (SC); (8) CIT v. Avtar Singh Wadhwan [2001] 247 ITR 260 (Bom); (9) CBDT v. Chowgule and Co. Ltd. [1991] 192 ITR 40 (Karn) ; (10) V. M. Salgaocar and Brother Ltd. v. Deputy Controller [1991] 187 ITR 381 (Karn); (11) CIT v. Best and Co. P. Ltd. [1966] 60 ITR 11 (SC); (12) CIT v. Dunlop Rubber Co. Ltd. [1983] 142 ITR 493 (Cal); (13) CIT v. Industrial Engineering Projects P. Ltd. [1993] 202 ITR 1014 (Delhi); (14) CIT v. Tata Engineering and Locomotive Co. Ltd. [2000] 245 ITR 823 (Bom); (15) Godhra Electricity Co. Ltd. v. CIT [1997] 225 ITR 746 (SC); (16) CIT v. Tejaji Farasram Kharawalla Ltd. [1968] 67 ITR 95 (SC); (17) Union of India v. A. Sanyasi Rao [1996] 219 ITR 330 (SC) ; (18) CIT v. Amarchand N. Shroff [1963] 48 ITR (SC) 59; (19) CIT v. Ajax Products Ltd. [1965] 55 ITR 741 (SC); (20) Sedco Forex International Drilling Inc. v. Joint CIT (Income-tax Appellate Tribunal "D" Bench, Delhi) (I. T. A. No. 2024/D2001) (assessment year 1998-99). (21) Circular No. 495 dated September 22,....
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.... LNG and to send out regasified LNG by means of a turnkey fixed lump sum price time certain engineering procurement, construction and commission contract. The project was to be completed in 41 months. The contract indisputably involved : (i) offshore supply, (ii) offshore services, (iii) onshore supply, (iv) onshore services and (v) construction and erection. The price was payable for offshore supply and offshore services in US dollars, whereas that of onshore supply as also onshore services and construction and erection partly in US dollars and partly in Indian rupees. 13. While determining the tax liability of the appellant, the hon'ble apex court has taken into consideration section 5(2), section 9(1)(i) and section 9(1)(vii) of the Income-tax Act and considered the question of imposition of tax on income arising from a business connection of the appellant. Sri Porus Kaka heavily relied upon paragraph 98 of the aforesaid judgment which contains the conclusion as held by the hon'ble apex court. Sub- clause (6) of clause (A) of paragraph 98 reads as under (page 446 of 288 ITR): "Clause (a) of Explanation 1 to section 9(1)(i) states that only such part of the income as ....