INCOME TAX ACT, 1961

Section 9(1)(vi)

Income deemed to accrual or arise in India - Royalty under section 9(1)(vi) - Charter receipts from provision of services through various vessels - In case of non-resident--AO not having examined applicability of section 44BB

Assedssee a Singapore based company, earned receipts from provision of services through various vessels , however, same were not offered to tax. AO characterized charter receipts earned by assessee as royalty. Assessee contended that since receipts earned from provision of services through various vessels were covered under section 44BB, the same had to be excluded from definition of 'royalty' under clause (iva) of Explanation 2 of section 9(1)(vi) denied specific exclusion granted for activiies covered under section 44BB from definition of royalty in Explanation 2 to section 9(1)(vi) on the ground that no amounts were offered to tax under section 44BB.Held: Neither AO nor DRP had examined applicability of section 44BB by looking into whether pith and substance of each of the contract/agreement entered by assessee was inextricably connected with prospecting, extraction or production of mineral oil. Therefore, matter was remanded back to AO to make an order afresh after examining each of the contract/agreement.

REFERRED :

FAVOUR : Matter remanded.

A.Y. : 2015-16

INCOME TAX ACT, 1961

Section 9(1)(vi)

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