ITAT MUMBAI
Deep Drilling 1 Pte. Ltd.
V/s.
Assistant Director of Income-tax (International Taxation)
IT APPEAL NO. 9038 (MUM.) OF 2010
[ASSESSMENT YEAR 2007-08]
APRIL 2, 2012
ORDER
R.S. Syal, Accountant Member – This appeal by the assessee arises out of the order passed by the Assessing Officer u/s 143(3) r.w.s. 144C(13) of the Income-tax Act, 1961 on 25.10.2010, in relation to the assessment year 2007-2008.
2. The first ground is against the taxability of mobilization fee received outside India for the voyage carried out outside India amounting to Rs. 1,46,95,980 u/s 44BB of the Act.
3. Briefly stated the facts of this ground are that the assessee, a non-resident foreign company, received mobilization fee of US$ 36,52,758.36 from Hardy Exploration and Production (India) Inc. (hereinafter called Hardy) towards mobilization of rig from Singapore to India. The total distance traveled by the rig from Singapore to India was 1646 Nautical Miles, out of which 207 Nautical Miles covered the distance within India and 1439 Nautical Miles to voyage of the rig outside the territorial waters of India. The assessee offered mobilization charges in relation to 207 Nautical Miles to tax by contending that mobilization charges in respect of 1439 Nautical Miles relating to territorial waters outside India were not liable to be considered in the amount referred to in section 44BB of the Act. In support of its view point, the assessee relied on the case of Saipem S.P.A. v. Dy. CIT [2004] 88 ITD 213 (Delhi) (TM)]. The Assessing Officer rejected the assessee’s contention by relying on the judgment of the Hon’ble Uttarakhand High Court in the case of Sedco Forex International Inc. v. CIT [2008] 299 ITR 238. He, therefore, held that the mobilization fee Rs. 14,69,59,807 equivalent of US$ 31,93,390 in relation to the distance traveled outside the territorial waters of India, was also liable to be taxed.
