TaxTMI 
TaxTMI 
2025 (9) TMI 1195
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.... by the DRP vide its order dated 19.12.2024 passed u/s. 144C (5) of the Act for the A.Y. 2022-23. 2. Brief facts of the case are that assessee is a company incorporated in Norway and tax resident of Norway engaged in providing seismic vessels on bareboat charter basis to Magseis FF LLC and Shearwater Geo Servies Limited. The assessee is having fleet of 25 vessels which were provided for transportation.The return of income was filed electronically on 25.11.2022 declaring income at Rs. 3,87,58,010/- wherein the tax was paid in terms of Article 21(4) of India-Norway DTAA. The case of the assessee was selected for scrutiny and transferred to international taxation Circle - 4 (2) (1), Mumbai. Thereafter the case is transferred to the present ....
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....arned Assessing Officer (Ld. AO) has erred in law and on facts in bringing to tax the revenues from the time charter contract with Shearwater GeoServices Limited under Section 44BB of the Income-tax Act, 1961 ('the Act"), without appreciating that the Appellant is eligible for the special provisions under Article 21 of the India Norway Double Tax Avoidance Agreement (DTAA) 2. That, on the facts and circumstances of the case, the Ld. AD has erred in law and in fact by applying Section 44BB of the Act, without appreciating that Article 21(4) of the India-Norway DTAA provides specific taxation provisions for income from the operation of vessels. The Ld. AO failed to consider that the special provisions under the DTAA should overri....
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....providing vessel for transportation, therefore, it is not directly engaged activity of exploration of any mineral for ONGC. He submits that once the assessee is not engaged in the exploration of exploitation of the seabed or subsoil or their natural resources as provided in para 2 and 3 Article 21 thus these para are not applicable to the case of the assessee. He further submits that para 4 of Article 21 of India Norway treaty refers two type of business/ services first transportation of supplies or personnel to or form a location or between locations, second operation of tugboats and other vessels auxiliary to such activities. Since the assessee is engaged in the operation of vessels and therefore, it'scase is fallen in the category provid....
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.... exploration and exploitation of seabed or sin terms of para 2 and 3 Article 21 of Indian Norway treaty and the activities of the assessee were not exceeding 30 days in aggregate in any twelve months period and assessee has not filed relevant details to controvert such findings, thus the AO was of the opinion that Article 21(4) are not applicable to the case of the assessee. He thus prayed for confirmation of orders of the lower authorities. 7. Heard both the parties and perused the material available on record. First we have to consider the Article 21 of Indian-Norway DTAA which reads as under :- ARTICLE 21 1. The provisions of this Article shall apply notwithstanding any other provision of this Agreement. 2. A pers....
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....ed or subsoil or their natural resources are being carried on in the other Contracting State, or from the operation of tugboats and other vessels 1 supplies or personnel to or from a location, auxiliary to such activities, shall be taxable only in the Contracting State of which the enterprise is a resident. Notwithstanding the provisions of this paragraph, profits derived from such operation may also be saved in the Contracting State in which the operation is carried on; but the tax so charged shall coed 50 per cent of the tax otherwise imposed by the domestic tow of that state. For the purposes of this paragraph, the amount of such profits subject in tax in India shall not exceed 7.5 per cent of the sums receivable. 5. (a....
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....1 and the old India Norway treaty was having the identical Article which was Article No. 23. Para 2 and 3 of Article 21 applied to the cases where the person is engaged in the offshore activity of exploration or exploitation of seabed or subsoil or their natural resources. Admittedly, in the present case the assessee is not engaged in any of such offshore and is providing its vessels for transportation to entities directly engaged in the exploitation / exploration of seabed or subsoil for ONGC as provided in para 2 and 3 of Article 21. This fact is admitted by the AO himself in the order in para 4.1 where reference of the agreement with both the companies is made by the AO. Therefore, it is clear that provision of Article 21 para 2 and 3 ar....