2017 (11) TMI 1775

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....Officer in holding that reimbursement of expenses aggregating to INR 14,51,797/- from GSPC were includible in the receipts for the purpose of determination of income under section 44BB of the Income-tax Act. The Ld. CIT(A) failed to appreciate that the said amount is devoid of any profit element and do not constitute income in the hands of the appellant. 2. That the Ld. CIT(A) erred in law in holding that the provisions of section 44BB do not apply to provision of barge, without appreciating that the receipts of INR. 340,035,436/- for activity carried out by appellant for L&T is inextricably linked with exploration, exploitation and production of mineral oil and cannot be held to be taxable as royalty in terms of section 9(1)(vi) o....

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....essee is dismissed. 4. The facts relating to the issue involved in ground No. 2 are that the assessee claimed that the operations of the vessels/equipments given on hire to L&T were outside India and in international waters. Therefore, their receipts were taxable only in Portugal and not in India as per Article 8 of DTAA between India and Portugal. It was also the submission of the assessee that since the Barge was supplied to L&T to be used ultimately in connection with exploration, extraction and production of mineral oil, the receipts from the supply of barge should have been taxed u/s. 44BB of the Act. Reliance was placed on the decision of Hon'ble Apex Court in ONGC vs. CIT (civil appeal No. 731 of 2007). The AO was of the opinion t....