TaxTMI 
TaxTMI 
2021 (2) TMI 946
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.... grounds inter alia that :- "1. On the facts and circumstances of the case, the Commissioner of Income Tax (Appeals) has erred in holding that the sum of Rs. 3,52,633/- is taxable u/s 115A of the Incometax Act, 1961 (hereinafter called the Act) and accordingly tax is deductible at such percentage. 2. It is contended that the sum of Rs. 3,52,633/- is taxable under the provisions of section 44BB of the Act. 3. The above grounds of appeal are independent and without prejudice to one another." 2. Briefly stated the facts necessary for adjudication of the controversy at hand are : Assessee is into the business of extraction and production of crude from the oil fields located in the State of Gujarat. To carry out its....
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..... DR for the Revenue relied upon the order passed by the ld. CIT (A). 6. In the backdrop of the aforesaid facts and circumstances of the case and arguments addressed by the ld. Authorized Representatives of the parties to the appeal, the short question arises for determination in this case is :- "as to whether payment made by the assessee to M/s. ESG Solutions for rendering services for microseismic acquisition, processing and interpretation of micro-seismic data in two observation wells during hydro-fracturing operations carried out in the wells at Bakrol oil field is in the nature of fee for technical services covered u/s 115A of the Act or it is inextricably connected with processing, extraction or production of mineral oil u....
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....s in Section 3(a) of the 1957 Act. Regard must also be had to the fact that mineral oils is separately defined in Section 3(b) of the 1957 Act to include natural gas and petroleum in respect of which Parliament has exclusive jurisdiction under Entry 53 of List I of the 7th Schedule and had enacted an earlier legislation i.e. Oil Fields (Regulation and Development) Act, 1948. Reading Section 2(j) and 2(jj) of the Mines Act, 1952 which define mines and minerals and the provisions of the Oil Fields (Regulation and Development) Act, 1948 specifically relating to prospecting and exploration of mineral oils, exhaustively referred to earlier, it is abundantly clear that drilling operations for the purpose of production of petroleum would clearly a....
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....ses and find that the brief description of the works covered under each of the said contracts as culled out by the appellants and placed before the Court is correct. The said details are set out below. S.No. Civil Appeal No Work covered under the contract 1. 4321 Drilling of exploration wells and carrying out seismic surveys for exploratory drilling. 2. 740 Drilling, furnishing personnel for manning, maintenance and operation of drilling rig and training of personnel. 3. 731 Drilling, furnishing personnel for manning, maintenance and operation of drilling rig and training of personnel. 4. 1722 Furnishing supervisory staff with expertise in operation and management of Drilling unit. 5. 729 ....
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....e potential and presentations outside India in connection with promotional activities for Joint Venture Exploration program. 22. 1531 Review of sub-surface well data, provide repair plan of wells and supervise repairs. 23. 733 Repair of gas turbine, gas control system and inspection of gas turbine and generator. 24. 741 Repair and inspection of turbines. 25. 737 Repair, inspection and overhauling of turbines. 26. 736 Inspection, engine performance evaluation, instrument calibration and inspection of far turbines. 27. 1522 Replacement of choke and kill consoles on drilling rigs. 28. 1521 Inspection of gas generators. 29. 1515 Inspection of rigs. 30. 2012 Inspect....
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....on of mineral oil. The dominant purpose of each of such agreement is for prospecting, extraction or production of mineral oils though there may be certain ancillary works contemplated thereunder. If that be so, we will have no hesitation in holding that the payments made by ONGC and received by the non-resident assessees or foreign companies under the said contracts is more appropriately assessable under the provisions of Section 44BB and not Section 44D of the Act. On the basis of the said conclusion reached by us, we allow the appeals under consideration by setting aside the orders of the High Court passed in each of the cases before it and restoring the view taken by the learned Appellate Commissioner as affirmed by the learned Tribunal.....