The assessee received revenue on account of the contract entered into with ONGC for providing services of seismic survey to the data correction supervision for the purpose of hydrocarbon reservoir exploitation, possible leak point identification and core site selection from available 2D and 3D seismic data, core acquisition with USBL System, sample processing, prevention and transportation, laboratories analysis and interpretation and report.
During the course of assessment proceedings, the assessee was asked to explain why looking at the nature of services, receipt may not be treated as fees for technical services and tax accordingly. The Assessing Officer did not agree with the explanation of the assessee and held that the assessee is rendering technical services and, therefore, its income is not covered under sec. 44BB of the Income-tax Act, 1961 and taxable as fees for technical services. The Learned CIT(Appeals) on the other hand following the decision of Delhi Bench of the ITAT in the case of CGG VERITAS – ITA No. 4653/Del/2010 – order dated 25.01.2012 has held that the income is assessable under sec. 44BB of the Act and not as fee for technical services. Hon’ble Delhi ITAT has affirmed the order of CIT(A) by following the decision of CGG Veritas (Supra), Fugro Geotem AS Vs. ADIT- ITA No. 5823/Del/2011 and PGS Geophysical A.S. vs. ADIT – ITA Nos. 612 of 2012. The Hon’ble ITAT has also distinguished the case of CIT vs. ONGC as an agent of M/s. Foramer France 299 ITR 438 and CIT vs. M/s. Rolls Royce Pvt. Ltd. (2007- TII-03-High Court Uttrakhand-Intt.).