CASE LAWS DETAILS
DECIDED BY: ITAT DELHI BENCH `E’, DELHI,
IN THE CASE OF: ONGC as representative assessee of Alberta Research Council, Canada Vs. JCIT, APPEAL NO: ITA No. 785 (Del) 2000, DECIDED ON July 23, 2010
The taxpayer, ONGC, engaged Alberta Research Council, Canada (“ARC”) for conducting a feasibility study on implementation of cycle steam stimulation (“CSS”) in its oil wells in India.The taxpayer filed a return of income as a representative assessee of ARC and claimed thatthe receipts of ARC from CSS services should be assessed under section 44BB of the Act. The Revenue rejected the contention of the taxpayer and classified the services rendered as‘fees for technical services’. On appeal, the Tribunal held that CSS helped in improving recovery of oil from oil fields by thinning the oil so that it moved from the formation to the well bore. Hence, such services should be excluded from the scope of fees for technical services,which was defined to exclude ‘mining or like projects’. The Tribunal observed that the term ‘in connection with’ appearing in section 44BB of the Act need not be physical operations being carried out below the surface of the earth. Accordingly, it ruled that the services performed by ARC should be assessed under section 44BB of the Act.