INCOME TAX ACT, 1961

Section 44BB

Presumptive taxation under section 44BB - Business of exploration, etc., of mineral oil - Applicability of section 44DA after amendment brought in proviso to section 44BB by Finance Act, 2010 -

Assessee, based at UK, was engaged in construction of turnkey oil production facilities. RIL, India had secured government approval for commercial development of oil field and entered into contract with Aker Installation FP AS (Aker), based at Norway, for installation of manifolds, umbilicals, flexible. Assessee had been sub-contracted by Aker a portion of the contract for installation of Subsea facilities. The sub-conracted scope comprised of in-country and out-country services. Assessee offered to tax, income earned under the said contract (consisting of in-country and cut-country receipts under section 44BB. AO held that by virtue of amendment brought in proviso to section 44BB by Finance Act, 2010 w.e.f. 1-4-2011. Section 44DA read with section 9(1)(vii) was applicable to the facts of assessee's case.Held: Income received from services rendered in connection with extraction and production of mineral oil had to be taxed under section 44BB as opposed to section 44DA as amendment to the sections by Finance Act, 2010 could not have effect of altering or effacing fundamental nature of both the provisions or their respective spheres of operation so as to take away separate identity of section 44BB.

Followed:DIT v. OHM Ltd. (2013) 352 ITR 406 (Del) : 2013 TaxPub(DT) 0541 (Del-HC).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2010-11

INCOME TAX ACT, 1961

Section 44BB

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