ASSISTANT COMMISSIONER OF INCOME TAX, DEHRADUN vs. SCHLUMBERGER ASIA SERVICES LIMITED, HARYANA

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ITA 143/DDN/2024Status: DisposedITAT Dehradun18 July 2025AY 2016-17Bench: SHRI YOGESH KUMAR U.S. (Judicial Member), SHRI MANISH AGARWAL (Accountant Member)5 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the 'pith and substance' of the services were inextricably connected with the prospecting, extraction, or production of mineral oil. Therefore, these services could not be categorized as 'fees for technical services' and were taxable under Section 44BB.

What were the facts?

The Revenue appealed against the CIT(A)'s orders concerning the taxability of business income as FTS instead of under Section 44BB. The assessee contended that the services provided were intrinsically linked to mineral oil extraction, citing Supreme Court and Tribunal precedents.

What were the issues?

Whether the business income derived from services related to mineral oil extraction is taxable as fees for technical services (FTS) or under Section 44BB of the Income Tax Act.

Which sections of the Income-tax Act were involved?

Section 44BB

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.

Income Tax Appellate Tribunal, DELHI

Before: SHRI YOGESH KUMAR U.S. & SHRI MANISH AGARWAL

Hearing: 07/07/2025Pronounced: 18/07/2025

Heard together (4 matters)

I.T.A. No. 172/DDN/2024
I.T.A. No. 143/DDN/2024
I.T.A. No. 142/DDN/2024
C.O. No. 1/DDN/2025

Read from the judgment's own cause title. This page is filed under one of them.

C.O. No. 1/DDN/2025( in (A.Y 2008-09) Schlumberger Asia Services Vs. Dy. Commissioner of Income Limited Tax 14th Floor, Tower C, Building Aayakar Bhawan, 13-A No. 10, DLF Cyber City, Subhash Road, Uttarakhand Phase 2, Gurgaon, Haryana 248001 PAN: AADCS1107J Appellant Respondent Assessee by Sh. Salil Kapoor, Ms.Ananya Kapoor, Ms.Soumya Singh and Mr.ShivamYadav, ADVs Revenue by Sh. Mohan Lal Joshi, Sr. DR Date of Hearing 07/07/2025 Date of Pronouncement 18/07/2025 ORDER PER YOGESH KUMAR, U.S. JM:

The above captioned Appeals are filed by the Department by challenging the orders of Ld. CIT (A)- Noida 2 for Assessment YearsA.Y 2008-09, A.Y 2016-17 and A.Y 2017-18 respectively, challenging the orders of the Ld. CIT(A) dated 28/06/2024.The Assessee has also filed C.O No. 1/DDN/2025, challenging the order of the Ld. CIT(A) for Assessment Year 2008-09.

2.

The only issue involved in the above appeals of the Revenue is relating to taxability of business income as FTS and not u/s 44BB offered by the Assessee. The Ld. Counsel for the Assessee submitted that the issue involved in the present Appeals are covered by the Judgment of Hon'ble Supreme Court in the case of Oil and Natural Gas Corporation Ltd. Vs. CIT reported in (2015) 376 ITR 306(S.C).

Further submitted that the Co-ordinate Bench of the Tribunal in Assessee’s own case held that service provided by the assessee is taxable under section 44BB of the Act, wherein placed reliance on the decision of Supreme Court in the case of ONGC (supra) and the Assessee’s own case of the Tribunal for other years. The Assessee has also placed reliance on the following judicial precedents. a . DIT v. Schlumberger Asia Services Ltd. dated 26/04/2019 (Uttarakhand High Court). b. DCIT v. Schlumberger Asia Services Ltd (AY 2013-14) ITAT, Dehradun. c. DCIT v. Schlumberger Asia Services Ltd (AY 2014-15 & AY 2015-16) ITA No. 6173/Del/2017 and ITA No. 5305/Del/2018, ITAT, Dehradun. d. Schlumberger Asia Services Ltd v. DCIT (AY 2018-19) ITA No. 20/DDN/2022, ITAT, Dehradun. e. DCIT v. Western Geco International Limited (Including order of the Hon'ble Third Member) ITA/6436/Del/2014 and ITA/6356/Del/2014, ITAT, New Delhi

3.

The Ld. Counselfor the Assessee further submitted that the Ld. CIT(A) has examined the services of the Assessee and held that such services are taxable u/s 44BB of the Act as per the principals laid down in the decision of Hon'ble Supreme Court in the case of Oil and Natural Gas Corporation Ltd. Vs. CIT(A) (supra) and the decisions of the Co-ordinate Bench of the Tribunal in Assessee’s own case observing that the ‘Pith and substance’ of the service are inextricably connected with the proposing, extravagation or production of mineral oil. Thus, submitted that the Appeals filed by the Revenue deserves to be dismissed.

4.

The Ld. Departmental Representative relying on the orders of the A.O., sought for allowing the Appeal.

5.

We have heard both the parties and perused the material available on record. The Hon'ble Supreme Court in the case of Oil and Natural Gas Corporation Ltd. Vs. CIT(A) (supra) after considering the opinion of attorney general of India, CBDT Instruction No. 1862, the provisions of Mines and Minerals (Regulation and Development) Act, 1957 and observed that if the "pith and substance" of the contract is inextricably connected with the prospecting, extraction, or production of mineral oil, though they may be ancillary works contemplated there under, the same cannot be categorized as "fees for technical services" and have to be included in the revenue chargeable to tax under section 44BB of the Act.

6.

Further in Assessee’s own cases for multiple years AY 2013-14, AY 2014-15, AY 2015-16 and in AY 2018-19, the Co-ordinate Bench of the Tribunal held that the entire revenues of the assessee to be includible in the revenues chargeable to tax under section 44BB of the Act. Further, Commissioner of Income Tax (Appeals)-II, Noida Assessee’s own case for AY 2011-12 and AY 2012-13held that the entire revenues of the assessee to be includible in the revenues chargeable to tax under section 44BB of the Act.

7.

Considering the above facts and circumstances we find no reason to interfere with the impugned orders of the Ld. CIT(A) for the above years under consideration. Finding no merits in the Appeals of the Revenue we dismiss the Appeals filed by the Revenue in ITA Nos.

142/DDN/2024.

8.

Since we have dismissed the Appeals filed by the Revenue, the Cross Objection filed by the Assessee have become in-fructuous.

9.

In the result, the Cross Objection No. 1/DDN/2025 filed by the Assessee is dismissed.

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