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Section 44D, read with section 115A, of the Income-tax Act, 1961 - Foreign companies, computation of income by way of royalties, etc., in case of - Assessment year 2001-02 - Assessee, a non-resident company, had rendered its services to ONGC for exploration, extraction and production of mineral oil - It claimed that tax was to be charged on its income under section 44BB - Whether services provided by assessee were technical services and, therefore, fee received by it for such technical services was chargeable to tax under section 44D, read with section 115A and not under section 44BB - Held, yes FACTS The assessee was a non-resident company. It had rendered its services to ONGC for exploration, extraction and production of mineral oil. It claimed that tax was to be charged on its income under section 44BB. The Assessing Officer, however, held that the assessee had rendered technical services and, therefore, its case was covered under section 44D, read with section 115A. On appeal, the Commissioner (Appeals) allowed the claim of the assessee. On the revenue's appeal, the Tribunal upheld the view of the Commissioner (Appeals). On revenue's appeal : HELD The assessee's case was that the services rendered by it were related to upgradation of plants and machineries for the purpose of drilling and oil exploration. However, it was not its case that plants and machineries were supplied by it. As such, the services rendered by it were nothing, but the technical services in the work of oil exploration for which it had charged the fee. [Para 8] In the above circumstances, the view taken by the Commissioner (Appeals) and the Tribunal could not be accepted and the view taken by the Assessing Officer was to be upheld whereby the assessee had been directed to pay tax at the rate of 15 per cent under section 44D, read with section 115A, instead of 10 per cent, chargeable under section 44BB. [Para 9] Arvind Vashistha for the Appellant. Udyog Shukla for the Respondent. JUDGMENT Prafulla C. Pant, J. - This appeal, preferred under section 260A of the Income-tax Act, 1961, is directed against the judgment and order dated 16-10-2006, passed by the Income-tax Appellate Tribunal,…

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