| Content Provider | Supreme Court of India |
|---|---|
| e-ISSN | 30484839 |
| Language | English |
| Access Restriction | NDLI |
| Subject Keyword | Income Tax Act and the formula contained therein for computation 1961: s.4488 - Scope and illlerpretation - s.4488 starts. with non- obstante clause |
| Content Type | Text |
| Resource Type | Law Judgement |
| Jurisdiction | India |
| Case Type | Appeal |
| Court | Supreme Court of India |
| Disposal Nature | Appeal Disposed Off |
| Headnote | Income Tax Act, 1961:s.4488 - Scope and interpretation - s.4488 starts. with non-obstinate clause, and the formula contained therein for computationof income is to be applied irrespective of the provisions of ss.28 to41 and ss.43 and 43A of the Act - For assessment under thisprovision, a sum equal to 10% of the aggregate of the. amountsspecified in sub-section "(2) shall be deemed lo be the profits andgains of such business chargeable to tax under the head 'profitsand gains of the business or profession' - Sub-section (2) mentionstwo kind~ of amounts which shall he deemed as profits and gains orthe business chargeable to tax in- India - Sub-clause (a) thereofrelates to amount paid or payable to the assessee or any person onhis behalf on account of provision of services and facilities inconnection with, or supply of plant and machinery on hire used, orto be used in the prospecting f01; or extraction or production of.mineral oils in India - Thus,, all amounts pertaining to the saidactivity which are received oi:i account of provisions of service;;and facilities in connection with the said facility are treated as profitsand gains of the business. - This clause clarifies that the amount sopaid .v!wl! be taxable whether these .are received in India or outsideIndia - Clause (b) deals with amount received or deemed lo bereceived in India in ·connection with such services and facilities asstipulated therein - Thus, whereas clause (a) mentions the amountwhich is paid ar payable, clause (b) deals with the amounts whichare received or deemed to be received in India - In respect of amountpaid or payable under clause (a) of sub-section (2), it is immaterialwhether these are paid in India or outside India -On the other hand,amount received or deemed to be received have to be in India.s.44BB - Special provision for calculating profits and gainsin connection with business of exploration of mineral oils -Assessee-Non-resident company entered into contract with ONGC for hire oftheir rig for carrying out oil exploration activities in India - Paymentof mobilisation fees for mobilisation movement of rig from foreignsoil/country to the off shore side at Mumbai - Whether said amountreceived is to be included for computation of deemed profits andgains of the business chargeable to tax under s.44BB of the Act -Held: Clause (a) and (b) of sub-section (2) of s.44BB stipulatesthat the amount paid under the said contracts as mobilisation feeon account of provision of services and facilities in connection withc the extraction etc. of mineral oil in India and against the supply ofplant and machinery on hire used for such extraction, clause (a) isattracted - Thus, this provision contained in s.44BB has to be readin conjunction with ss.5 and 9 of the Act and ss.5 and 9 of the Actcannot be read in isolation - The said amount paid to the assesseesD as mobilisation fee is treated as profits and gains of business and,therefore, it would be "income" as per s.5 - This provision alsotreats this income as earned in India, fictionally, thereby satisfyinglythe test of s.9 of the Act as well - Circular 110.495 dated September22 1987 issued by CBDT.s.44BB - Assessee-Non-resident company entered intocontracts with ONGC for hire of their rig for carrying out oilexploration activities i11 India - Reimbursement of cost of tools lostin hole by ONGC - Taxability of - Held: Not taxable - This amountis not covered by sub-section (2) of s.4488 of the Act as ONGC hadlost certain tools belonging to the assessee, and had compensatedF for the said loss by paying the amount in question. |
| Judge | Hon'ble Mr. Justice Arjan Kumar Sikri |
| Neutral Citation | 2017 INSC 1060 |
| Petitioner | Sedco Forex International Inc. Through It`s Constituted Attorney Mr. Navin Sarda |
| Respondent | Commissioner Of Income Tax. Meerut & Anr. |
| SCR | [2017] 11 S.C.R. 399 |
| Judgement Date | 2017-10-30 |
| Case Number | 4906 |
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