Law:

Section:

Section 44BB of the Income-tax Act, 1961 - Non-residents - Mineral oil, business for prospecting/exploration, etc., in case of - Applicant, a non-resident company, is engaged in business of seismic data acquisition and processing for companies engaged in exploration work on a worldwide basis - Services provided by applicant are aimed at increasing success of oil exploration and gas exploration companies by assisting them in maximizing production from existing reservoirs - Applicant has entered into contracts with ONGC and Cairn Energy to conduct seismic survey and data acquisition activities - Whether income derived by assessee under contracts with 'ONGC' and 'Cairn Energy' is to be computed by applying provisions of section 44BB - Held, yes FACTS The applicant, a non-resident company, is engaged in the business of seismic data acquisition and processing for companies engaged in the exploration work on a worldwide basis. The seismic data (in processed form) is used to create highly accurate images of the earth's sub-surface which, in turn, are used by the oil and gas exploration and production companies for locating potential oil and gas reserves based upon the geology of the area observed. The applicant has entered into contracts with the two Indian companies, viz., ONGC and Cairn Energy to conduct seismic survey and the data acquisition activities. On these facts, the applicant has sought advance ruling on the question whether income derived by it under the contracts with the ONGC and Cairn Energy is to be computed by applying provisions of section 44BB. The applicant contends that services rendered by it are aimed at increasing the success of oil and gas exploration companies by assisting them in maximizing the production from existing reservoirs and, therefore, provisions of section 44BB would be applicable. HELD Section 44BB is a provision for computation in respect of the non-resident assessee engaged in the business of providing services or facilities in connection with or supplying plant and machinery on hire basis or to be used in the prospecting for or extraction or production of mineral oils. In the instant case, the applicant is a non-resident…

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