Case Law Details
Global Geophysical Services Limited (A.A.R. No. 873 of 2010)- Would the special provisions for computing profits under section 44BB be applicable to a non-resident carrying on business of seismic data acquisition and processing under contract with Indian concerns?
On an application made to the Authority of Advance Ruling by the non-resident on the above issue, the Authority observed that in an identical issue in Geofizyka Torun SP. Z.O.O. (2010) 320 ITR 0268 (AAR), it was observed that without seismic data acquisition and interpretation, it is impractical to carry out the activity of prospecting of mineral oil and gas which is a step in aid to its exploration. The seismic data (in processed form) is used to create highly accurate images of the earth’s sub-surface which in turn are used by the exploration and production companies for locating potential oil and gas reserves based upon the geology observed.
Accordingly, in this case, the AAR ruled that the said activities and services of the applicant clearly fell within the description of section 44BB and the income derived by the applicant under the contracts with Indian concerns, namely ONGC and Cairn Energy, for seismic data acquisition and processing were to be computed under the provisions of section 44BB.
Before the Authority for Advance Rulings
(Income-tax) New Delhi
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