INDO-UAE DTAA: Mere physical presence of non-resident’s vessel in territorial waters of India pursuant to hiring of vessel on Bareboat Charter terms by applicant does not, without anything more, constitute a permanent establishment

DECIDED BY: AUTHORITY FOR ADVANCE RULINGS (INCOME TAX), NEW DELHI, IN THE CASE OF: Seabird Exploration FZ, LLC, In re, APPEAL NO: AAR No. 829 of 2009, DECIDED ON JULY 23, 2010

R U L I N G

[By Hon’ble Chairman]

1. The following facts are stated by the applicant in this application for Advance Ruling under section 245Q of the Income Tax Act 1961, hereafter referred to as the `Act’.

1.1. Seabird Exploration FZLLC (`the Applicant’) is a company incorporated under the laws of United Arab Emirates and is a tax resident of UAE. Seabird is engaged in the business of rendering geophysical services to oil and gas exploration industry. Its core business activity involves: 1) 2D Seismic data acquisition and processing. 2) 2D/3D Shallow water data acquisition and processing. In India, the applicant has been providing offshore 2D and 3D seismic data acquisition and processing services to Oil & Natural Gas Corporation Limited (`ONGC’) and other oil companies in India. For the purpose of executing the scope of work under such contracts, the applicant requires seismic survey vessels. Seismic survey vessels are special kind of vessels which are fitted with seismic recording systems and receiver units which are used for undertaking seismic data acquisition and on-board data processing.

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