Law:

Section:

Section 44BB of the Income-tax Act, 1961 - Non-residents - Mineral oil, business for prospecting/exploration, etc., in case of - Applicant is a tax resident of British Virgin Islands - It is engaged in business of acquisition and processing of 2D and 3D seismic data for companies engaged in exploration and production of mineral oils in India - It has entered into a contract with an Australian company in relation to carrying out 2D marine seismic data acquisition and processing services in oil and gas blocks located - It has sought advance ruling on taxability of revenue to be earned by it under aforesaid contract under section 44BB - It contends that mobilization/demobilization revenues taxable in hands of applicant in India should be restricted only to revenues attributable to distance travelled in Indian territorial water as compared to total distance travelled to/from India - Whether since applicant is engaged in business of providing services or facilities in connection with extraction or production of oil, revenues to be earned by it under seismic data acquisition and processing contract with Australian company in India are taxable in accordance with section 44BB - Held, yes - Whether once an assessee opts to come under section 44BB(1), provision itself deems its profits and gains as 10 per cent of aggregate of amounts specified in sub-section (2), i.e., amount paid or payable whether in or out of India to assessee on account of provision of services in India and there is no scope for splitting up amount payable to assessee - Held, yes - Whether, therefore, entire mobilization/demobilization revenues received by applicant with respect to seismic data acquisition and/or processing would be taxable in India at an effective rate of 4.223 per cent - Held, yes FACTS The applicant-company is a tax resident of British Virgin Island. It is engaged in the business of acquisition and processing of 2D and 3D seismic data for companies engaged in the exploration and production of mineral oils in India. It entered into a contract with an Australian company in relation to carrying out 2D marine seismic data acquisition and processing services in oil and gas blocks…

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