Section 44B is introduced Wef AY 1983-84.
Assessee is an NRI and doing business of providing services, supplying plant and machinery on hire for extraction of mineral oils.
44BB. (1) Notwithstanding anything to the contrary contained in sections 28 to 41 and sections 43 and 43A, in the case of an assessee, being a non-resident, engaged in the business of providing services or facilities in connection with, or supplying plant and machinery on hire used, or to be used, in the prospecting for, or extraction or production of, mineral oils, a sum equal to ten per cent of the aggregate of the amounts specified in sub-section (2) shall be deemed to be the profits and gains of such business chargeable to tax under the head “Profits and gains of business or profession” :
Assessee is an NRI and is engaged in business of providing services or facilities in connection with, or supplying plant and machinery on hire used, or to be used, in the prospecting for, or extraction or production of mineral oils, a sum equal to ten percent of the aggregate of the amounts specified in sub section (2) shall be deemed to be the profits and gains of the business chargeable to tax under the head “ profits and gains of business or profession” Notwithstanding anything to the contrary contained in sections 28 to 41 and and section 43 and 43A of the Act. This means in spite of what has been said in those sections which is contrary to this provision. Ignoring those sections
Provided that this sub-section shall not apply in a case where the provisions of section 42 or section 44D or section 44DA or section 115A or section 293A apply for the purposes of computing profits or gains or any other income referred to in those sections.
This is proviso that says this sub section shall not apply in a case where the provision of section 42 or section 44D or section 44DA( wef AY 2011-12) or section 115A or section 293A apply for the purpose of computing profits or gains or any other income referred to in those sections.
(2) The amounts referred to in sub-section (1) shall be the following, namely :—
(a) the amount paid or payable (whether in or out of India) to the assessee or to any person on his behalf on account of the provision of services and facilities in connection with, or supply of plant and machinery on hire used, or to be used, in the prospecting for, or extraction or production of, mineral oils in India; and
(b) the amount received or deemed to be received in India by or on behalf of the assessee on account of the provision of services and facilities in connection with, or supply of plant and machinery on hire used, or to be used, in the prospecting for, or extraction or production of mineral oils outside India.
Section 44BB (2)(a). The amount paid or payable whether in or out of India to the assessee or to any other person on his behalf on account of the provision is considered here under this provision. For extraction or production of mineral oils in India
Section 44BB (2)(b) The amount received or deemed to be received in India by or on behalf of the assessee on account of the provision is considered here for extraction or production of mineral oils outside India
Wef AY 2004-05
(3) Notwithstanding anything contained in sub-section (1), an assessee may claim lower profits and gains than the profits and gains specified in that sub-section, if he keeps and maintains such books of account and other documents as required under sub-section (2) of section 44AA and gets his accounts audited and furnishes a report of such audit as required under section 44AB, and thereupon the Assessing Officer shall proceed to make an assessment of the total income or loss of the assessee under sub-section (3) of section 143 and determine the sum payable by, or refundable to, the assessee.
An assessee may claim lower profits, In that case he has to maintain the books of accounts and get them audited by a CA and the AO shall proceed to make assessment of that person under section 143 sub section (3) of the Act
Explanation.—For the purposes of this section,—
(i) “plant” includes ships, aircraft, vehicles, drilling units, scientific apparatus and equipment, used for the purposes of the said business;
(ii) “mineral oil” includes petroleum and natural gas.
This explanation refers to plant and mineral oil as mentioned in this section.
Summary of the section
This section is meant for profits and gains of the NRI engaged in the business of extraction of mineral oils in India and outside India.
The profits and gains of the assessee who is NRI is calculated at the rate of 10 percent of the amount paid or payable in India or outside India for the mineral oils in India
The profits and gains of the NRI is calculated at the rate of ten percent of the amount received or deemed to be received in India for the mineral oils outside India.
This section is not applied where the provisions of section 42,44D,44DA,115A or section 293A apply.
In spite of written in sections 28 to 41, 43 and 43A which is contrary to written in section 44BB. Leaving aside written in those sections, a sum equal to ten percent of the aggregate amount is calculated.
An assessee may claim lower profits, but he has maintain such books of accounts and get them audited by a CA and his case shall be decided u/s 143(3) of the Act.
Plant includes ships, aircraft, vehicles, drilling units, scientific apparatus and equipment
Mineral oil includes petroleum and natural gas.
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Disclaimer : The author is not responsible for any damages if caused due to mistake or not following the provisions strictly in the proceedings with any authority or court. This is just academic in nature and purpose. Author has tried to brief and explain the provision. Thanks with regards.
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