ACIT, DEHRADUN vs. WESTERM GECO INTERNATIONAL LTD., GURGAON

ORDER PER BEENA PILLAI, JUDICIAL MEMBER:

The present cross appeals have been preferred by the assessee as well as revenue against order of Ld. CIT (A),

2 I.T.A.No. 5400/Del/2013 Dehradun wide order dated 30/07/2015 for assessment year 2010-11 on the following grounds of appeal:

2.2. During the year under consideration the assessee has offered the revenues from the following contracts:

3 I.T.A.No. 5400/Del/2013 Name of the Contract No. and Scope of work Contract company date Revenue contract details ONGC Contract Long term leasing of one Q-marine 5,365,822,749 No.MR/WOB/MM/ vessel for the field season 2007-08, GP/QML/Hon'ble two Q-marine vessels for the field Supreme Court season 2008-09 and one Q-marine /OB/ 2006/EB- vessel for field season 2009-10 in 2132 Indian Offshore ONGC Contract Long term leasing of one Q- 70,718,795 No.MR/WOB Marine vessel for the field /MM/GP/Q season 2006-07 and two Q- ML/Hon'ble Marine vessels for the field Supreme season 2007-08 in India Court/OB/2 Offshore 006/EB- 2109 ONGC Agreement dated 30.08.2006 ONGC Contract No. AMC for hiring of MT Survey (API) in 30,964,735 MT Survey Sector 7 (Combay Basin) ONGC Contract Carrying out Simultaneous 2,288,000 No.5010048244 dt. Inversion in Block CY- 27.07.2009 DWN-2001/1 ONGC Contract Annual Maintenance 19,444,291 No.MAT/MP/E- contract for Upgradation, II(2739)/AMC- maintenance and support of WG/2008-09 dt. Omego Software Licences 04.02.2009 ONGC Contract For Hiring of AMC Servsics 999,567 No.901005356 for a period of 3 years for Agreement dated Omego Processing System 03.08.2006 on Board M/V Saga Sandhani ONGC Work order No. Installation and 20,339,354 5010037378 Commissioning of all the Purchase order dated software license 05.03.2008 Reliance Contract No. OG1- 3D Seismic Data Onshore 33,049,053 Industries 3653385 dated Processing Ltd. 16.03.2008 Reliance Contract No. Advanced processing (2.5D 6,339,637 Industries OG13650181 dated Inversion) of CSEM Imaging Ltd. 06.02.2008 Reliance Contract No.OG1- 3D Data Onshore 27,536,585 Industries 3606488 dated Processing Ltd. 31.07.2006 Reliance Contrc NO.OG1- 2D Data Onshore 5,352,678 Industries 3621135/001 dated Reprocessing of Colombia Ltd. 09.02.2007 Borojo Block Santos Contract No.700008 Marine 3D Seismic data 57,908,845 dated 23.01.2009 processing services fo blocks NEC-DWN-2004/1 and NEC-DWN-2004/2 Offshore India Cairn Contract Provision of 3D PSTM 41,680,828 No.1000000 Seismic Data Processing 381 Servsics

4 I.T.A.No. 5400/Del/2013 Hardy Contract No. Delivery Delivery of Pre Migration 462,50 of pre migration gahes fsor PY3 and FonE 0 gathers for PV3 and FonE ENI Contract 3D Seismic Data Processing 5,792,869 No.226/AN/PROC/2 Servsics 009 dated 06.11.2009 GSPC Contract Q-Marine Acquisition, 1,487,565,365 GSPC/O&G/GM(P&D Processing and Inversion )08/20-12-2008/KG- for Block KG-OSN-2005/3 Q-Marine dated 20.01.2009 ADANI Contract AWEL/MB- Acquiring Marine 3D 223,823,982 OSN- Seismic Data and 2005/2/2009/CC00 processing for Block MB- 2 dated 18.11.2009 OSN-2005/2 for Adani Welspun Exploration Ltd. BG One time Data Gathering & Seismic 6,347,203 work Deliverables Stat Oil One time work Seismic Interpretation 1,155,250 purchase order dated course at UAN 02.09.2009 Total Receipts 7,407,572,086 2.3. It has been submitted by the assessee that the above contracts have been continuing since previous year in respect of most of them and in respect of new contracts executed for which revenue have been offered during this year are also having similar nature of scope of work. The scope of work of the above contracts include processing of PD line data, survey long-term lease of Marine technology, hiring of Q-Marine Vessel with the help of its personnel and equipment, seismic data acquisition and processing, hiring of vessel and technology, in contracts with RIL and ONGC, and undertake seismic data processing services for Essar. 2.4. During the year under consideration the assessee had received gross receipts of Rs.7,40,75,72,086/- from the above contracts. The assessee had offered its income for taxation as per section 44BB of the Income-tax Act.

5 I.T.A.No. 5400/Del/2013 2.5. The AO observed that section 44BB was applicable for computing profit and gains in connection with the business of exploration etc. of mineral oils in the case of non-resident and since assessee was rendering technical services, therefore, section 44BB was not applicable. He issued a notice u/s 142(1), in response to which the assessee pointed out that its income was taxable u/s.44BB of the Act as the services rendered by it were not technical services within the meaning of Explanation 2 to section 9(1)(vii) of the Act. The assessee further pointed out that for services in the nature of “seismic surveys”, the applicable section was 44BB and said services could not be taxed under sections 44D, 44DA or 115A of the Act. The assessee further pointed out that the amendment to section 44BB by way of insertion of section 44DA in the proviso to section 44BB was prospective in nature and, accordingly, the applicability of sections 44D and 44DA got excluded. 2.6. The AO, however, after considering the provisions of section 44BB and also taking into consideration the amendments brought in w.e.f. 1.4.2011 by Finance Act 2010, concluded that assessee’s receipts were effectively connected with the project office of the assessee in India and, therefore, taxable u/s 44DA of the I.T. Act as these are fees for technical services. Ld.AO further made addition in respect of reimbursement of mobilisation/demobilisation receipts in the hands of the assessee to an extent of Rs.63,46,38,677/-.

6 I.T.A.No. 5400/Del/2013 2.7. The Ld.AO also disallowed the reimbursement of service tax received by the assessee to an extent of Rs.25,50,30,477/-. 3.Being aggrieved with the order of Ld.AO, the assessee preferred an appeal before the ld.CIT(A). 3.1. The assessee submitted before the lower net CIT (A) that the issue relating to services rendered are covered under section 44 BB of the act and the amendment to section 44 BB is applicable from assessment year 2011-12 on words, and the same is not retrospective in nature. The assessee relied upon the decision of this Tribunal in assessee’s own case for assessment year 2007-08, in ITA No. 5977/Del/2010. The assessee had also placed reliance upon the decision of M/s CGG Veritas Services SA Vs. Additional Director of Income Tax (International taxation), Denradun, reported in (2012) 50 SOT 335 (DEL). The ld.CIT(A), following the decision of assessee’s own case for the previous assessment year allowed the ground released by the assessee. However on the issue relating to reimbursement of the mobilisation/demobilisation expenses the ld.CIT (A) confirmed the addition made by the Ld.AO.

“Based on the facts and circumstances of the case, Western Geco International limited (hereinafter referred to as 'WGIL' or the 'Appellant') respectfully craves leave to prefer an appeal against the order dated 30 July

7 I.T.A.No. 5400/Del/2013

2013 passed by the Commissioner of Income Tax (Appeals) - II [hereinafter referred to as the 'learned CIT(A)'] under section 250(6) of the Income-tax Act, 1961 (hereinafter referred to as the 'Act') (received by the Appellant on 19 August 2013) on the following grounds:

Addition qua mobilization / demobilization receipts attributable to distance travelled outside India: 1. The learned CIT(A) has erred in taxing receipts amounting to Rs 634,638,677 from mobilization/ demobilization of vessels attributable to distance travelled outside India under section 44BB of the Act without appreciating that such activities are carried outside India and not subject to tax in India.

Taxability of service tax charges

2. The learned CIT(A) has erred on facts and in law in taxing receipts on account of service tax charges amounting to Rs. 25,50,30,477 under section 44BB of the Act as opposed to Appellant's claim for non-taxability of such receipts.

The appellant craves leave to add, amend, vary, omit or substitute any of the aforesaid grounds of appeal at any time before or at the time of hearing of the appeal so as to enable the Hon'ble Tribunal to decide the appeal in accordance with the law.”

Rervenues Appeal ITA No. 5400

“1. Whether on the facts and circumstances of the case, the Ld CIT(A) has erred in holding that the revenues of the assessee from the activities of proceedings of PD line data, long- term lease of marine vessels, AMC for hiring of MT Survey, carrying out simultaneous inversion, AMC for up-gradation, maintenance & support for omega software licenses, installation & commissioning of software licenses, 3D

8 I.T.A.No. 5400/Del/2013 seismic data onshore processing, 2D data onshore reprocessing, provision of PSTM seismic data processing services etc ("services") were not in the nature of Fee for Technical Services (FTS) squarely covered u/s 9(l)(vii) of the IT Act, 1961 ("The Act").

2. Whether on the facts and circumstances of the case, the Ld ClT(A) has erred in holding that the income of the assessee was not taxable under the provisions of see 44DA r.w.s. 115A even though the nature of services rendered by the assessee were technical in nature liable to tax u/s 44DA of the Act.

4. Whether on the facts and circumstances of the case, the Ld CIT(A) has erred In interpretation of the legislative intent behind the scheme of taxation envisaged In 9(l)(vii) read with sections 44DA and 44BB of the Act, ignoring the decision in the case of CIT vs M/s ONGC As Agent of M/s Foramer France [(2008) 299 ITR 438 Utarakhand] .

5. Whether on the facts and circumstances of the case, the Ld CIT(A) has erred in ignoring the distinct scheme of taxation of FTS/Royalty and disregarding the insertion of provisos in section(s) 44BB/44DAIl15A and the rationale behind the introduction of said clarificatory proviso's in the Finance Bill 2010.

9 I.T.A.No. 5400/Del/2013

7. Whether on the facts and circumstances of the case, the CIT(A) has erred in not appreciating the fact that proviso to section 44DA brought about by the Finance Act 2010 was only clarificatory in nature and its application has to be read into the main provision with effect from the time the main provision came into effect in view of the decision of the Hon'ble Supreme Court in the case of Sed co Forex International Drilling vs CIT.

8. Whether on the facts and circumstances of the case, CIT(A) has erred in not appreciating the findings given by the AO who has held that the receipts of the assessee is in the nature of Fee for Technical Services and has estimated the income by applying deemed profit rate of 25% on gross receipts as per the provisions of Rule 10 of the Income tax Rules, 1962 in the absence of books of accounts.”

10 I.T.A.No. 5400/Del/2013 received from mobilisation/demobilisation, whether taxable in India or not is now settled by the order of this tribunal in assessee’s own case for assessment year 2009-10 in ITA number 04/09/2006/del/12. This Tribunal wide order dated 24/01/2014 has held in para 10 as under: “10. After hearing rival contentions, we are of the considered opinion that the issue is covered by the judgement of the jurisdictional High Court in the case of Sedco Forex International Inc. (supra). We are not convinced with the arguments of the Ld. Counsel for the assessee trying to distinguish this case law for the reason that the entire payment in question was made for the purpose of execution of the contract in India. Mobilisation is a stage payment, as part of the total consideration for execution of the contract. The assessee would be moving its machinery from one place of work to another place of birth. Mobilisation is paid as advance for such movement and is generally adjusted against running bills. It is not a case where a separate payment is made for a transportation contract. The submission that the assessee would try to work out, based on some bases, the revenue is attributable to the activity of mobilisation carried out outside India, cannot be accepted, as such an exercise would amount to estimating income for activities outside India, when the scope of the contract is for execution of the contract in India. Mobilisation in our view is an incidental activity to the main activity of carrying out the contract in India. The judgement of Hon’ble Supreme Court in the case of Ishikawajima and Hundai Heavy Industries Ltd. VSD I T, reported in 288 ITR 408 has been discussed by the Hon’ble High Court in the case of Sedco Forex International Inc (supra). The ratio laid down by Hon’ble Supreme Court in that case is not applicable here as it is not a case where separate parts of a contract are executed at different places. The argument that the payment was in the nature of reimbursement of expenses incurred by the assessee company and hence not income was also rejected by the Hon’ble High Court. Thus we are unable to agree with the contentions of Ld.

11 I.T.A.No. 5400/Del/2013 counsel for the assessee. Thus these grounds of the assessee are dismissed.”

5.3. Respectfully following the decision of this tribunal in assessee’s own case for assessment year 2009-10 we are inclined to dismiss this ground of appeal raised by the assessee for the year under consideration. Accordingly ground No. 1 raised by the assessee in its appeal stands dismissed.

6. Ground No. 2 raised by the assessee relates to the service tax charges which were reimbursed to the assessee were treated as part of the receipt. The Ld. AR submits that this issue now stands settled by the order of Hon’ble jurisdictional High Court in the case of the DIT Vs. Mitchell Drilling International Pvt. Ltd. in ITA No. 403/2013. 6.1. On perusal of the judgment of the Hon’ble High Court in DIT Vs. Mitchell Drilling International Pvt. Ltd (supra), the question that was considered is as under: “ whether the amount of service tax collected by the assessee from its various clients should have been included in gross receipts while computing its income under the provisions of section 40 4B of the act?” The Hon’ble High Court in para 17 has held as under: “17. The court accordingly holds that for the purpose of computing the presumptive income of the assessee for the purpose of section 44 BB of the act, the service tax collected by the assessee on the amount paid by it for rendering services is not to be included in the gross receipts in terms of section 44 BB (2) read with section 44 BB (1). The service tax is not an amount paid or payable, or received or deemed to be received by the assessee for the services rendered by it. The assessee

12 I.T.A.No. 5400/Del/2013 is only collecting the service tax for passing it onto the government.”

6.2. The Hon’ble High Court while deciding this issue has dealt with all the judgments, referred by Ld.CIT (DR) before us, which are as under: 1. Chowringhee sales Bureau Pvt.Ltd. Vs. CIT reported in (1973) 87 ITR 542(SC) 2. George Oaks (P) Ltd Vs. State of Madras (1962) 2 SCR 570. 6.3. The Hon’ble High Court has distinguished these judgments to the facts therein, which are identical to that of the present case before us. Respectfully following the decision of Hon’ble High Court we are of the considered OP near that the service tax collected cannot be included in the gross receipts in terms of section 44 BB(1) of the act. Accordingly this ground raised by the assessee stands allowed.

Now we shall deal with the appeal filed by the revenue in ITA 5400/Del/2013.

13 I.T.A.No. 5400/Del/2013 has given specific finding of permanent establishment of assessee being there in India. He referred to the decision of ITAT Delhi Bench in the case of CGG Veritas Services SA Vs. (supra), wherein in para 46 of the order the Tribunal has, inter alia, observed as under: “46. On combined reading of section 44DA(1) and 115A(1)(b) it is clear that the provisions of section 44DA(1) are applicable in the case of a non-resident assessee who carries on business in India through a permanent establishment, or performs professional services from a fixed place of profession, and fees for technical services paid under the contract is effectively connected with such permanent establishment or fixed place of profession in India. In section l15A(l)(b) the Finance Act, 2003 with effect from 1.4.2004 substituted words "a non-resident (not being a company) or a foreign company includes any income by way of royalty or fees for technical services other than income referred to in sub-section (1) of section 44DA" for words "a foreign company, includes any income by way of royalty or fees for technical services". Therefore, w.e.f. 1.4.2004 fee for technical services which. is not connected with permanent establishment of business or fixed place of profession in India, will be taxable u/s l15A(l)(b) of the Act. As observed earlier section 44DA was inserted in proviso to section 44BB (1) by the Finance Act, 2010 with effect from 1.4.2011 and simultaneously inserted second proviso to section 44DA applicable from assessment year 2011-12 according to which provisions of section 44BB (1) will not be applicable in respect of income referred to this section. On combined reading of proviso to section 44BB (1) and second proviso to section 44DA-it is clear that the fee for technical services rendered in connection with prospecting for or extraction or production of mineral oil though effectively connected with PE or fixed place of profession will fall not under section 44BB(1) and will be assessable under section 44DA of the Act. To make it more clear the fee for technical services can be divided in following categories:

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(i) Fee for technical services rendered in connection with prospecting for or extraction or production of mineral oil having business PE or fixed place of profession-(section 44DA); (ii) Fee for technical services rendered in connection with prospecting for or extraction or production of mineral oil without having business PE or fixed place of profession- (section l15A); (iii) Other fee for technical services having business PE or fixed place of profession-(section 44DA); (iv) Other fee for technical services without business PE or fixed place of profession-(section l15A); Thus it is abundantly clear that with effect from assessment year 2011-12 fee for technical services whether rendered in connection with prospecting for or extraction or production of mineral oil or otherwise will be assessable either u/s 44DA or section l15A of the Act depending on fact whether such receipts are effectively connected with PE or fixed place of profession, or not. However, for assessment year 2004-05 to 2010-11 the consideration received for fee for technical services rendered in connection with prospecting for or extraction or production of mineral oil though effectively connected with PE or fixed place of profession will fall outside the scope of section 44DA and will be assessable under section 44BB (1) of the Act for the simple reason that proviso to section 44BB(1) does not contain section 44DA for these years.”

7.2. The Ld. AR has placed as reliance on the decision of this Tribunal in assessee’s own case for assessment year 2007-08 and 2009-10 in ITA No. 5977/Del/2010.

7.3. Ld.AR referred to the decision of Hon’ble Supreme Court in the case of ONGC Ltd. Vs. CIT (2015) 59 Taxmann.com 1, wherein it has been held that, where the dominant purpose of agreement is for prospecting,

15 I.T.A.No. 5400/Del/2013 extraction or production of mineral oil, though there may be certain ancillary works contemplated thereunder, the payments received by the non-resident assessee or foreign companies under the said contracts are assessable under the provisions of section 44BB and not section 44D of the Act. The relevant extract of the decision by the Hon’ble Court is as under; “The above facts indicate that the pith and substance of each of the contracts/agreement is inextricably connected with prospecting, extraction or production of mineral oil. The dominant purpose of each of such agreement east for prospecting extraction or production of mineral oils though there may be certain ancillary works contemplated thereunder. If that be so, we will have no hesitation in holding that the payments made by ONGC and received by the non-resident assessee is all foreign companies under the said contracts is more appropriately assessable under the provisions of section 44 BB and not section 44D of the act. On the basis of the said conclusion reached by ours, we allow the appeals under consideration by setting aside the orders of the High Court passed in each of the cases before it and restoring the view taken by the Learned Appellate Commissioner as affirmed by the Learned Tribunal.”

8.1. Ld. CIT(DR) relied on the decision of Hon’ble Uttrakhand High Court in assessee’s own case DIT Vs. Western Geco International Ltd., reported in (2013) 35

16 I.T.A.No. 5400/Del/2013 Taxman.com 345. He submitted that the Hon’ble court has set aside the issue back to the assessing officer for examining the same.

8.2. In the rejoinder ld.AR submitted that the Hon’ble Uttrakhand High Court has actually dismissed the appeal filed by the revenue. He submitted that the Hon’ble High Court has set aside the issue to the assessing officer only with respect to permanent establishment or fixed place of profession which has not been examined by the assessing officer. He submitted that the Hon’ble High Court in para 2 of that decision has held as under: “2. Section 44 BB of the act deals with income arising out of, amongst others, business of providing services or facilities in the prospecting for, or extraction or production of mineral oils. However section 44 BB applies only to such assessee, who is a non-resident and not to an assessee who has a permanent establishment in India or has a fixed place of profession situated in India by the judgment under appeal, the claim of the department that the assessee is not covered by section 44 BB and it falls either under sections 115 A over 44 DA was not accepted by the tribunal in view of the insertion of the proviso to subsection (1) of section 44 BB by the finance act, 2010 w.e.f. 1st April, 2011. Whereas, the section 44 BB deals with all kinds of services in connection with prospecting for, extraction or production of mineral oils; section 44DA deals with, amongst others, fees for technical services from a non- resident, not being a company, or a foreign company, after 31st of March, 2003 at the same time, section 115A deals with technical service fees in case of a foreign company. Therefore we are of the view that the tribunal was right in concluding that in respect of fees received by a non-resident assessee for providing services in connection with prospecting for, extraction or production of mineral oils, such assessee would be covered by 17 I.T.A.No. 5400/Del/2013 section 44 BB until proved before proviso to subsection (1) of section 44 BB was inserted.”

8.3. The ld.AR submitted that the assessment year before the Hon’ble Uttarakhand High Court was 2007-08 does he submitted that the amendment being prospective in nature would not be applicable to the year prior to 2012-13.

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(supra). We are not inclined to accept the contentions advanced on behalf of the revenue, reproduced earlier, for the simple reason that the issue is squarely covered by the decision of Hon’ble Jurisdictional High Court, decision of Hon’ble Delhi High Court in the case of OHM (supra) and by the decision of the ITAT in CGG Veritas (supra) and Phonex (supra).

9.2. Hon’ble Delhi High Court in the case of OHM Ltd. Reported in AAR No.935 of 2010, wherein in para 11 &12, has been held as under; “11. We do not think that there is any error in the view taken by AAR. Basically the rule that the specific provision excludes the general provision has been applied. Section 44BB is a special provision for computing the profits and gains of a non-resident in connection with 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 including petroleum and natural gas. Section 44DA is also a provision which applies to non-residents only. It is, however, broader and more general in nature and provides for assessment of the income of the non- resident by way of royalty or fees for technical services, where such non-resident carries on business in India through a permanent establishment situated therein or performs services from a fixed place of profession situated in India and the right, property or contract in respect of which the royalties or fees for technical services are paid is effectively connected with the permanent establishment or fixed place of profession. Such income would be computed and assessed under the head "business" in accordance with the provisions of the Act, subject to the condition that no deduction would be allowed in respect of any expenditure or allowance which is not wholly or exclusively incurred for the business of such permanent establishment or fixed place of profession or in respect of amounts, if any, paid by the permanent establishment to its head office or to any of its other offices. Under section 44BB one does not 19 I.T.A.No. 5400/Del/2013 find any reference to a permanent establishment in India. The type of services contemplated by the provision is more specific than what is contemplated by Section 44DA. Section 44BB refers specifically to "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". Revenues earned by the non-resident from rendering such specific services are covered by Section 44BB. It is a well settled rule of interpretation that if a special provision is made respecting a certain matter, that matter is excluded from the general provision under the rule which is expressed by the maxim "Generalliaspecialibus non derogant'. It is again a well- settled rule of construction that when, in an enactment two provisions exist, which cannot be reconciled with each other, they should be so interpreted that, if possible, effect should be given to both. This was stated to be the "rule of harmonious construction" by the Supreme Court in Venkataramana Devaru v. State of Mysore, AIR 1958 SC 255. If as contended by the Revenue, Section 44DA covers all types of services rendered by the non-resident that would reduce section 44BB to a useless lumber or dead letter and such a result would be opposed to the very essence of the rule of harmonious construction. In South India Corporation (P) Ltd. v. Secretary, Board of Revenue Trivandrum, AIR 1964 SC 207 it was held that a familiar approach in such cases is to find out which of the two apparently conflicting provisions is more general and which is more specific and to construe the more general one as to exclude the more specific.

respect of which the royalty or fees for technical services is paid should be effectively connected with the permanent establishment. Such a requirement has not been spelt out in Section 44BB; moreover, a flat rate of 10 percent of the revenues received by the non-resident for the specific services rendered by it are deemed to be profits from the business chargeable to tax in India under Section 44BB, whereas under Section 44DA, deduction of expenditure or allowance wholly and exclusively incurred by the non-resident for the business of the permanent establishment in India and for expenditure towards reimbursement of actual expense by the permanent establishment to its head office or to any of its other offices is allowed from the revenues received by the non-resident. Because of the different modes or methods prescribed in the two sections for computing the profits, it apparently became necessary to clarify the position by making necessary amendments. That perhaps is the reason for inserting the second proviso to sub-section (1) of Section 44DA and a reference to section 44DA in the proviso below sub-section (1) of Section 44BB. A careful perusal of both the provisos shows that they refer only to computation of the profits under the sections. If both the sections have to be read harmoniously and in such a manner that neither of them becomes a useless lumber then the only way in which the provisos can be given effect to is to understand them as referring only to the computation of profits, and to understand the amendments as having been inserted only to clarify the position. So understood, the proviso to sub-section (1) of Section 44BB can only mean that the flat rate of 10 percent of the revenues cannot be deemed to be the profits of the nonresident where the services are of the type which do not fall under that section, but are more general in nature so as to fall under Section 44DA. Similarly, the second proviso to sub-section (1) of Section 44DA can only be interpreted to mean that where the services are general in nature and fall under the sub- section read with Explanation 2 to Section 9(1)(vii) of the Act, then an assessee rendering such services as provided in Section 44BB cannot claim the benefit of being assessed on the basis that 10 percent of. the 21 I.T.A.No. 5400/Del/2013 revenues will be deemed to be the profits as provided in Section 44BB. In other words, the amendment made by the Finance Act, 2010 w. e. f. 01.04.2011 in both the sections, cannot have the effect of altering or effacing the fundamental nature of both the provisions and their respective spheres of operation or to take away the separate identity of Section 44BB. We do not, therefore, see how these amendments can assist the Revenue's contention in the present case, put forward by the learned Senior Standing Counsel. We, therefore, agree with the AAR that in the present case the profits shall be computed in accordance with the provisions of section 44BB of the Act and not section 44DA.

9.4. As far as the reliance of ld. CIT(DR) on the decision of Hon’ble Uttrakhand High Court in assessee’s own case is concerned, we find that the said decision has dismissed the appeal filed by the revenue. The Hon’ble High Court has set aside the issue to the Ld.AO with respect to permanent establishment or fixed place of profession, which has not been examined by the assessing officer. On the other hand, we find the Hon’ble High Court has held a finding of this tribunal that in respect of fees received by a non-resident assessee for providing service in connection with prospecting for, or extraction or production of mineral oil, such assessee would be covered by section 44BB till assessment year 2011-12.

22 I.T.A.No. 5400/Del/2013 Supreme Court in the case of ONGC (supra) has set at rest the entire controversy by holding that provisions of various services in connection with the prospecting for, or extraction or production of mineral oils, is taxable on presumptive basis u/s 44BB of the Act. The services carried on by assessee are in connection with the prospecting for mineral oils and, therefore, following the decision of Hon’ble Supreme Court, the assessee’s appeal deserves to be allowed. In view of above discussion, the assessee’s appeal is allowed and the appeal filed by the Revenue stands dismissed.