Law:

Section:

[2009] 179 Taxman 257 (Uttaranchal)/[2009] 309 ITR 244 (Uttaranchal)/[2009] 223 CTR 318 (Uttaranchal) [2009] 179 TAXMAN 257 (UTTARAKHAND) HIGH COURT OF UTTARAKHAND Commissioner of Income-tax * v. ONGC Ltd. (No. 1) PRAFULLA C. PANT AND DHARAM VEER, JJ. IT APPEAL NO. 118 OF 2007 APRIL 10, 2008 Section 44D, read with section 115A, of the Income-tax Act, 1961 - Foreign Companies, computation of income by way of royalty, etc., in case of - ONGC was representative of non-resident assessee-company - Assessee-company had been rendering its services to ONGC for purposes of exploration, extraction and production of mineral oils for a long time - ONGC engaged assessee-company for rendering services in connection with maintenance of ResPrep, ResGram, ResMod, and ResSeis being four modules of software - Assessee claimed that tax was to be charged on its income under section 44BB whereas revenue contended that assessee had rendered technical services for which it had been paid fee and, therefore, its case was covered under section 44D, read with section 115A - Whether since services in question rendered by assessee were nothing but technical services relating to work of oil exploration, assessee was to be directed to pay tax at rate of 15 per cent under section 44D, read with section 115A, instead of 10 per cent chargeable under section 44BB - Held, yes FACTS The ONGC was a representative of the non-resident assessee. The assessee had been rendering its services to ONGC for the purposes of exploration, extraction and production of mineral oils for a long time. During the year under consideration, the assessee was engaged by ONGC for rendering services in connection with maintenance of ResPrep, ResGram, ResMod, and ResSeis being four modules of software. The assessee claimed that the tax was to be charged on its income under section 44BB whereas the revenue contended that since the assessee had rendered the technical services for which it had been paid fee, its case was covered under section 115A, read with section 44D. HELD The sub-section (1) of section 44BB provides that the sub-section would not apply where the provisions of sections 42, 44D, 115A or 293A are applicable…

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