| COURT: | Supreme Court |
| CORAM: | Pinaki Chandra Ghose J, Ranjan Gogoi J |
| SECTION(S): | 44BB, 44D, 9(1)(vii) |
| GENRE: | Domestic Tax, International Tax |
| CATCH WORDS: | Fees for technical services, mining services |
| COUNSEL: | Arvind Datar |
| DATE: | July 1, 2015 (Date of pronouncement) |
| DATE: | July 4, 2015 (Date of publication) |
| AY: | 1985-86 |
| FILE: | Click here to view full post with file download link |
| CITATION: | |
| S. 44BB vs. 9(1)(vii)/44D: The "pith and substance" test has to be applied to determine the dominant purpose of each agreement. If the dominant purpose is mining, the income is assessable only u/s 44BB and not as "fees for technical services" u/s 9(1)(vii) & 44D | |
The pith and substance of each of the contracts/agreements is inextricably connected with prospecting, extraction or production of mineral oil. The dominant purpose of each of such agreement is for prospecting, extraction or production of mineral oils though there may be certain ancillary works contemplated thereunder. If that be so, we will have no hesitation in holding that the payments made by ONGC and received by the non-resident assessees or foreign companies under the said contracts is more appropriately assessable under the provisions of Section 44BB and not Section 44D of the Act
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