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Siem Offshore Crewing AS vs. ADIT (ITAT Delhi)

DATE: March 11, 2016 (Date of pronouncement)
DATE: March 14, 2016 (Date of publication)
AY: 2008-09
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S. 9/ 44BB: Income received by a non-resident under a time charter agreement accrues and arises in india even when the vessel and crew are outside the territorial waters of India. Such income is assessable on a presumptive basis u/s 44BB

Gross payments are intricately linked to the services/works rendered by the assessee and arise due to the execution of contract in India, under the terms and conditions of the contract between the assessee and Siem Offshore Inc. The vessel was hired by the contract and it was only for this purpose that the vessel and the crew were involved in the said contract. Thus, it is improper on the part of the assessee to offer to tax its revenues only on a pro-rata basis based upon the number of days the vessel was stationed within 200 nautical miles from the Indian shore line. As the contract for the provision of crew was a continuing contract, it cannot be said that revenues were not earned for the period the vessel was out of the territorial waters of India. Hence, the entire contract amount is to be considered for the purpose of calculating the gross receipts and all receipts received against the execution of the contract would come under the purview of gross receipts. Thus, gross amounts for the months of November 2007, December 2007 and January 2008 are to be included in the gross receipts