What is required under the section is that the services/facilities provided by the assessee should be “in connection with” prospecting etc. of mineral oil. Nowhere it is mandated that the services should be provided directly by the party who is engaged in prospecting etc. of mineral oil or is directly a member of the Production Sharing Contract. Therefore, the income cannot be taxed as business profits under Article 7 of the Indo-UK DTAA or under S.44DA of the Act but has to be taxed under S.44BB only. (AY. 2010-2011)
Dy. CIT v. Technip UK Ltd. (2019) 69 ITR 7 (SN) (Delhi)(Trib.)
S. 44BB : Mineral oils–Presumptive taxation-Services or facilities in the prospecting for or extraction of mineral oils–Cannot be taxed as business profits or royalties-DTAA–India-UK [S. 2(13), 44DA, Art. 7]