TaxTMI 
TaxTMI 
2024 (12) TMI 850
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....ons of Sec. 40(a)(i) are not applicable to the case of the assessee for the reason that the income was offered on presumptive basis u/s 44BB. The Ld. CIT-DR controverted the arguments of Ld. AR and also filed written submissions. Having heard rival submissions and upon perusal of case records, our adjudication would be as under. 3. Proceedings before lower authorities 3.1 Upon perusal of directions of Ld. DRP, it could be seen that the assessee is non-resident company in India and incorporated in Singapore. The assessee is engaged in providing services and facilities relating to exploration and exploitation of mineral oil and natural gas. The return of income was filed as project office of the assessee in India. The assessee filed return of income on 13-03-2022 admitting income of Rs. 13.97 Crores in terms of Sec. 44BB of the act. The assessee claimed TDS credit of Rs. 12.38 Crores. The Ld. AO passed draft assessment order on 12-12-2022 by making disallowance for non-deduction of tax at source (TDS) u/s 40(a)(i) for Rs. 55.41 Crores. Before DRP, the assessee contended that it was assessed u/s 44BB (1) and paid tax on presumptive basis @10% of aggregate amount received by the ....
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....esumptive basis @10% of gross receipts arising out of a project office situated in India. The returned income has been accepted by Ld. AO in the assessment order. The payee under consideration i.e., DDPL is also a resident of Singapore. The provisions of Sec.44BB of the act starts with a non obstante clause and excludes the application of other provision of Section 28 to 41 and Section 43 and 43A of Income Tax Act which would include the provisions of Sec.40a)(i) also. The impugned transactions have been entered into between two non-residents outside India. The provisions of Sec.44BB read 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 ....
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....computing business of exploration of mineral oil u/s 44BB. 5. We find that impugned issue is covered in assessee's favor by the earlier decision of Tribunal in assessee's own case for AY 2019-20, IT(TP) No.38/Chny/2022 dated 20.07.2023 wherein it was held as under:- 5. We have heard both the sides, perused the materials available on record and gone through the draft assessment order, directions of the ld. DRP and final assessment order. We have considered the written submissions filed by the assessee. We have also carefully considered the detailed written submissions filed by the Revenue in light of certain judicial precedents. In this instant case before us we are called upon to decide whether the payments made to DD8PL for bare boat hire charges is liable to tax in India or not. The assessee has filed a return under section 44BB of the Act offered lower profit than the 10 percentage of aggregate receipts by maintaining the books of account and other documents and audited and furnished the tax audit report u/s 44AB of the Act. The ld. DR raised an objection that the assessee company is covered by the provision of Section 44BB of the Act. Section 44BB of the Act is an e....
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....or providing rig services to M/s. CAIRN India Ltd., is not liable to tax in India as royalty u/s.9(1)(vi) and Article-12 of the India Singapore Tax Treaty. Further, income of the assessee is also not taxable as business profits in terms of the provisions of Sec.44BB of the Act, because business profits of an enterprise of a contracting state shall be taxable only in that state unless such enterprise is carried out its business in other contracting state through a Permanent Establishment. Since, there is no Permanent Establishment in the case of the assessee the question of taxation of business profits in India does not arise. Therefore, we are of the considered view that the AO as well as the ld. DRP completely erred in taxing income of the assessee in India. Hence, we direct the AO to delete the addition made towards income of the assessee in terms of Sec. 9(1) and Artlce-12 of the India Singapore Tax Treaty. 6. Further the assessee has argued that the provisions of section 195 of the Act will not applicable as the payments were made in outside India. The provisions of section 195 are to be invoked, only if such sum which is chargeable to tax under the Income-tax Act, 196....
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....hat department can keep track of remittances being made to non residents outside India; rather it gets attracted to cases where payment made is a composite payment in which certain proportion of payment has an element of 'income' chargeable to tax in India and payer seeks a determination of appropriate proportion of sum chargeable - Held, yes. iii. Decision of Hon'ble ITAT Delhi in case of ACIT Vs. Interocean Shipping (I) (P) Ltd., 51 ITD 582 (Delhi), wherein it is held that: "The ship hired out by NR was not a ship but was a specially designed vessel of the nature of machinery which would ply in the ocean and assist in the construction of offshore platforms that were used for the exploration of mineral oil. Therefore, the claim of the department that the hire charges received by NR were taxable in the contracting State because of article 9, was to be rejected because the said article covers shipping income arising from the operation of ships. Article 7 of the DTA covers business profits to be taxed in the Contracting and the Contracted State, i.e., the other State, only when the enterprise which is a resident of the Contracting State has a pe....