Law:

Section:

Section 44BB of the Income-tax Act, 1961 - Non-residents, mineral oil, business for prospecting/exploration, etc., in case of - Whether section 44BB does not close its doors to an applicant who desires to know which part of its income accrues or arises in India and how much - Held, yes - Whether applicant can exercise its aforesaid right provided it opts to get income computed under section 44BB(3) - Held, yes - Applicant, a tax resident of Norway, provides geophysical services to oil and gas exploration industry - It conducts seismic surveys and provides onshore seismic data acquisition and other associated services - Cairn India awarded contract to applicant to carry out 3D marine seismic data acquisition services located in offshore coastal areas - Applicant states that services rendered by it would be utilized by Cairn in its oil exploration and production activities - Applicant further states that for purposes of conducting seismic surveys, vessel is mobilized from outside India to site area in India where work is to be carried out - Similarly when vessel is demobilized after completion of work, it involves moving out of equipment and personnel from site area - Applicant is paid for mobilization as well as demobilization of its vessel from site area - Applicant seeks advance ruling on following two question, firstly, whether revenues earned or to be earned by it under seismic data acquisition and processing contracts in India are taxable under section 44BB at effective tax rate of 4.223 per cent and, secondly, whether entire mobilization/demobilization revenues received by applicant with respect to seismic data acquisition and/or processing contracts would be taxable in India or revenues attributable to distance travelled by vessel in India would be taxable in India - Whether in view of decision of Authority for Advance Ruling in case of Geofizyka Torun Sp.Zo.o, In re [2010] 186 Taxman 213 (AAR - New Delhi), first question raised by applicant has to be answered in affirmative - Held, yes - Whether as regards second question, once revenues earned by applicant are taxable in India under section 44BB, it is to be directed that entire…

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