TaxTMI 
TaxTMI 
2017 (10) TMI 1449
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....not directly engaged in Oil Production and Exploration and therefore, liable to tax u/s 9(l)(vi)/9(l)(vii) read with section 44DA and not section 44BB of the IT Act,1961 ('Act'). 1(a) The Ld CIT(A) has erred in holding that the receipts of the assessee from 'non- PSC partners for supplying plant & machinery on hire ('equipment rental') are not in the nature of Royalty u/s 9(l)(vi) of the Act, 1961 read with section 44DA of the Act and are eligible for treatment under presumptive provisions of section 44BB of the Act. 2. Whether on the facts and in the circumstances of the case, the Ld CIT(A) has erred in ignoring the effect of the amendment brought in vide Finance Act, 2010 w.e.f. 01.04.2011, in terms of which income covered by section 44DA has been specially excluded from the scope of section 44BB for Asstt. Years 2011- 12 the year under consideration onwards. 2.1 Whether on the facts and circumstances of the case, the Ld CIT (A) has erred in ignoring the distinct scheme of taxation of Fees for Technical Services and Royalty and disregarding the insertion of proviso in section 44BB/44DA/115A and the rationale behind the introduction o....
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.... to deduct tax at source. The case does not lay down a general preposition of law that interest u/s 234B is not chargeable in all cases, particularly in cases where the Non-Resident assessee/payee/deductee has played a role in inducing non-deduction or short-deduction on the part of the payer/deductor. b. The Ld CIT(A) has erred in failing to take note of the observations of the Hon'ble High Court in the case of M/s Mitsubishi [330 ITR 578, Del] that the role of the assessee/payee/deductee in short-deduction or nondeduction of tax needs to be ascertained before claim regarding non-liability to interest u/s 234B of the Act is accepted, a proposition affirmed subsequently in the case of M/s Alcatel Lucent (judgment of Delhi High Court dated 07.11.2013 in ITA No. 327 & Ors of 2012). 6. The appellant prays for leave to add, amend, modify or alter any grounds of appeal at the time or before the hearing of the appeal. 2. At the outset, the learned counsel of the assessee submitted that the issues-in-dispute raised in the grounds of appeal by the Revenue are duly covered in favour of the assessee by the order of the Tribunal in ITA Nos. 592, 746 & 1810/Del/2....
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.... 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), an assessee may claim lower profits and gains than the profits and gains specified in that sub-section, if he keeps and maintains such books of account and other documents as required under sub-section (2) of section 44AA and gets his accounts audited and furnishes a report of such ....
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.... actually engaged in prospecting for, or extraction or production of, mineral oils as canvassed by the revenue for the applicability of section 44BB. One may refer other provisions of the statue which insists on an agreement. For instance, section 42 deals with allowances allowable in computing the profits or gains of any business consisting of the prospecting for or extraction or production of mineral oils in relation which the Central Govt, has entered into an agreement. Section 80IA(4)(i)(b) provides that the enterprise carrying on the business of developing, operating and maintaining any infrastructure facility has to enter into an agreement with the Central Government of a State Govt, or a local authority etc. In the absence of any requirement in section 44BB that the person providing services, facilities or plant and machinery on hire should have directly entered into a contract or agreement with the person actually engaged in prospecting for or extraction or production of, mineral oils, one cannot curtail the scope or applicability of section 44BB to second leg contractors whose contracts or agreements are with first leg contractors but whose services or facilities or plant ....
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....the jurisdictional High Court on the issue in dispute and thus, we do not find any error in the finding of the ld. CIT-A. 7. The second issue of charging of interest under section 234B of the Act has also been decided in favour of the assessee by the Tribunal (supra) as under: "31. We have carefully considered the rival contentions. We have carefully considered the above argument which is mainly that in a case of a non-resident whose entire income was subject to tax deduction at source under s. 195 interest u/s 234B is not chargeable. There are conflicting decision of Honourable Delhi High Court on the issue as it is evident from the decisions relied up on by assessee as well as LD DR. In the case cited by LD AR reasoning of the Hon'ble Court was that once the entire income of the assessee was subject to tax deduction at source under s. 195, the assessee was not liable to pay any 'advance tax' in terms of section 209(l)(d) and hence, could not be faulted for shortfall in payment of advance tax. However in the case cited by LD DR it is that when the income is chargeable to tax in India of Non-resident u/s 195 they cannot escape the liability of interest u/s 234B ....