2018 (3) TMI 1083

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....f delay. Hence, the delay is condoned and the appeal is admitted for hearing. 2. Briefly stated, the facts of the case are that the assessee leased drillship 'Belford Dolphin' to M/s Dolphin Drilling Ltd. (DDL). Return of income was filed declaring business income in terms of section 44BB(3) of the Income-tax Act, 1961 (hereinafter also called 'the Act'). During the course of assessment proceedings, the Assessing Officer (AO) observed that the assessee received a sum of Rs. 163,51,113/- from DDL, which was reflected in the Profit & Loss Account, but, not taken into consideration in the computation of income. The assessee was also found to have availed credit of tax deducted at source on the above amount in the return of income filed. Con....

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....he assessee, it is necessary to have a look at the relevant provisions of section 44BB, which are as under:- Special provision for computing profits and gains in connection with the business of exploration, etc., of mineral oils. 44BB. (1) Notwithstanding anything to the contrary contained in sections 28 to 41 and sections 43 and 43A, in the case of an assessee, being a nonresident, 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 subsection (2) shall be deemed to be the profits and gains of....

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....nd thereupon the Assessing Officer shall proceed to make an assessment of the total income or loss of the assessee under subsection (3) of section 143 and determine the sum payable by, or refundable to, the assessee. 4. A close look at sub-section (1) of section 44BB reveals that where a non-resident is engaged in the business of providing services or facilities in connection with supplying plant & machinery on hire used or to be used in the prospecting for minerals etc., its income under the head 'Profits and gains of business or profession' shall be 10% of the aggregate amounts specified in sub-section (2). Sub-section (3), which is more relevant for our purpose, starts with a non-obstante clause qua sub-section (1) and provides that t....