ORDER
B.M. Kothari, Accountant Member
1. These two appeals by the Revenue are directed against a consolidated order passed by the Commissioner (Appeals) on 14-2-1990 for assessment years 1985-86 and 1986-87. The following common ground has been raised in these appeals
“That the learned Commissioner (Appeals) has erred in law as well as on facts in hold-mg that income was ‘assessable’ under section 44BB and not as fees from technical services under section 44D of the Act.”
2. M/s. Oil & Natural Gas Commission (ONGC) as Agent of M/s. Foramer, France (non resident) submitted return of income for assessment year 1985-86 on 28-2-1986 declaring total income of Rs. 8,34,750 and for assessment year 1986-87 on 1-12-1986 declaring total income of Rs. 12,66,980. The Assessing Officer observed that the non-resident company M/s. Foramer, France (FF) had entered into a contract with ONGC for supply of supervisory staff and personnel having expertise in operation and management of drilling rigs “Sagar Jyoti” and “Sagar Pragati” in assessment year 1985-86 and for operation and management of drilling rig “Sagar Ratna” in assessment year 1986-87. The Assessing Officer relying upon the findings given in the assessment order for preceding year 1984-85 held that assessment of the said non-resident company should be completed as per provisions of section 44D, as the non-resident company had provided technical services to the ONGC. The payments received by the non-resident company from ONGC are in the nature of fees for technical services. The Assessing Officer accordingly computed the taxable income of the assessee on the amount paid by ONGC to the non-resident company after excluding the amount claimed to have been paid on account of reimbursement charges for the supply of material etc. Thus, the tax was levied on the amount of net receipts of the foreign company in accordance with section 44D of the Income-tax Act, 1961. The taxable income was thus determined in assessment year 1985-86 at Rs. 1,11,30,010 and at Rs. 1,68,93,120. Tax @ 40 per cent was charged on the said amount in view of provisions of section 44D read with section 115-A of the Income-tax Act, 1961.
3. The Commissioner (Appeals) following the order of the ITAT, Delhi in the case of M/s. Scan Drilling Company, ITA No. 4834 (Delhi) dated 7-9-1987 for assessment year 1985-86 held that the income of the assessee is assessable under section 44BB of Income-tax Act, 1961 and not as fees from technical services under section 44D of Income-tax Act. The Commissioner (Appeals) also relied upon the appellate order passed in assessee’s own case by the Commissioner (Appeals) for assessment year 1984-85.
4. The Revenue has filed the present appeals challenging the aforesaid order passed by the Commissioner (Appeals) contending that the Commissioner (Appeals) has erred in holding that the income was assessable under section 44B and not as fees from technical services under section 44D of the Act.
4.1 Shri S. N. Bhargava, the learned Commissioner of Income-tax who represented the appellant, was fair enough to state that prima facie it appears that the point in issue is covered by an earlier order passed by the Tribunal in assessee’s own case for assessment year 1984-85 and also by the decision of the Tribunal in the case of ONGC as Agent of M/s. Scan Drilling Company. He, however, pointed out that the Tribunal while rendering above referred earlier decisions failed to take into consideration certain vital facts, which justifies a fresh look on the point in issue.
4.2. Shri Bhargava, the learned Commissioner (DR) submitted that there is a subtle and significant difference between two separate types of agreements executed between ONGC and M/s. Foramer, France. He drew our attention towards Agreement dated 4-2-1988 under which M/s. F. F. had agreed to provide the services of expatriate supervisory staff and personnel with expertise in operation and management of Jack-Up rig named “Sagar Pragati”. He submitted that this contract was a contract simplicitor for providing the services of such expatriate personnel of the contractor, M/s. F. F. It was simply a Service & Maintenance Contract. Then he drew our attention towards another Agreement dated 17-10-1986 executed between ONGC and the same Contractor, M/s. F. F. in which the Contractor agreed to provide services for drilling operations in the offshore water of India. The Contractor, M/s. F. F. were the owner of the Jack-Up rig and they not only agreed to provide the services of their expatriate personnels but also provided the facilities of use of their Jack-Up rig for such drilling operations to ONGC.
4.3 Shri Bhargava submitted that a plain reading of section 44B of the Act indicates that the said section applies only in cases of those non-residents who are engaged in the business of providing services or facilities in connection with or supplying Plant & Machinery on hire, use or to be used in the prospecting for, or extraction or production of mineral oils. In the case of the assessee, so far as income derived by them under a service and maintenance contract is concerned, the provisions of section 44BB cannot be applied. Because the F.F. was not engaged in carrying on any such business in India of providing the services or facilities contemplated in the service and maintenance contract. ONGC is the owner of the rigs. M/s. F.F. had only provided the services of expatriate personnels and technicians for operating and maintaining the drilling rigs. This cannot be treated as any business carried on by M/s. F. F. in India. Therefore, section 44BB is not at all applicable on the facts of the present case for both the years under consideration.
4.4 Mr. Bhargava, the learned Commissioner (DR) then invited our attention towards the definition of “fees for technical services” given in Explanation 2 to section 9(1)(vii). He submitted that the aforesaid Explanation clearly provides that fees for technical services means the consideration including any lump-sum consideration for rendering of any managerial, technical or consultancy services including the provisions of services of technical or other personnel. The payment made by ONGC to M/s. F. F. under the said services and Maintenance Contract clearly come within the ambit of the aforesaid definition of “fees for technical services”. The only exception carved out in the said Explanation 2 relates to consideration for any construction, assembly, mining or like project undertaken by the recipient or consideration which would be income of the recipient chargeable under the head “Salaries”. The payment made by ONGC to FF under the said agreements do not come within the scope of such exception enumerated in Explanation 2. The amount paid by ONGC to M/s. F. F. cannot be treated as consideration for any construction or assembly work. Construction would mean something like construction of a building or construction of a turnkey project. Assembly would also mean assembling various components and parts and thereby erect any plant etc. The activity undertaken by F. F. Will also not come within the ambit of “mining or like project”. He, therefore, vehemently argued argued that the payment made by ONGC to M/s. F. F. is in the nature of fees for technical services and has rightly been charged to tax by the Assessing Officer under section 441) read with section 115A.
4.5 The learned Commissioner (DR) further drew our attention towards a decision of the Tribunal, Delhi Bench ‘D’ in the case of Boudier Christian, [IT Appeal No. 7438 (Delhi) of 1989], and other technicians/employees of the same foreign company, Foramer France. A, copy of the said decision has been placed at pages 82 to 104 of the PB. These appeals in the cases of employees of M/s. F.F. also relate to assessment years 1984-85 and 1985-86. He drew our attention towards para 3 of the said order in which the contract executed between ONGC and M/s. F.F. on, 4-8-1984 war described as “Operating Service & Maintenance Contract.” The Tribunal considered the claim of the foreign technicians employed by M/s. F.F. under section 10(6)(vi) of the Act. One of the conditions prescribed in the said section is that the foreign enterprise of which the technician is employed should not be engaged in trade or business in India. The Tribunal after considering the entire relevant material, gave its, findings in para 8 at page 14 that the foreign enterprise itself being in the business of off-shore drilling operations acquired the expertise;and was able to furnish expatriate supervisory staff and personnel in operation and management of Jack-up rigs. Under the Agreement, they had provided personnel who were well trained in operation and management of jack-up rigs. It is thus clear that, the foreign enterprise was only providing technical services and it is difficult to agree with the view expressed by the Department that the foreign enterprise was engaged in the business of off-shore drilling operations in India. Shri Bhargava contended that in the case of the aforesaid employees of the same foreign company who were engaged for carrying out the work of operation and management of Jack-up, rigs pursuant to the same agreement, it has been held that M/s. F.F. was only providing technical services and was not engaged in the business of off-shore drilling operation in India. This decision clearly supports the View taken by the Assessing Officer in the case of the employer company M/s. F.F. The learned Sr. D.R. invited our attention towards various other findings given by the Tribunal in the aforesaid decision dated 13-5-1991. It was pointed out that this decision of the Tribunal in the case of the foreign technicians who were employees of the same foreign enterprise was not brought to the notice of the Tribunal which decided the earlier year’s appeal or at the time of decision in the case of ONGC as Agent of the Scan Drilling Company.
4.6 The learned Sr. D.R. then invited our attention towards the decision dated 8th September, 1995 of Hon’ble Authority for Advance Rulings in Advance Ruling Petition No. P-6 of 1995, In, re [1998] 100 Taxman 206 (AAR-New Delhi). A copy of the said judgment was placed at pages 115 to 120 of the Paper Book. It was held in the aforesaid decision that the provisions of section 44BB shall not apply where provisions of section 44D, section 115A etc. are applicable. –
The distinction between fee for technical services and-income arising in the case of business have been examined at great length with reference to the provisions contained in sections 44BB, 44D and Explanation 2 to section 9(1)(vii). He submitted that this decision was also not available when the earlier orders were passed by the Tribunal. The learned CIT(DR) strongly urged that the earlier view taken by the Tribunal requires re-consideration and fresh look in the light of the aforesaid submissions. He strongly urged that the view taken by the Assessing Officer should be upheld.
5. Shri Kavesh Syal, the learned counsel appearing on behalf of the assessee strongly supported the order of the Commissioner (Appeals). He invited our attention towards Written Submissions dated 23-7-1998/ 1-1-1998. It was pointed out by him that M/s. F.F. are not only engaged in the business of drilling and mining of mineral oil but they have rich experience in this line of business. M/s. F. F. have been in the business of off-shore drilling operations since long and that is why ONGC desired to utilise the services of experienced staff and supervisory personnel of M/s. F.F. for assisting ONGC in the operation and management of the jack-up rigs for the exploration and development of oil and gas off-shore in India. He submitted that three contracts relating to ONGC and FF relating to operation and management of jack-up rigs “Sagar Joyti”, Sagar Pragati” and “Sagar Ratna” are almost identical. A perusal of the various clauses of the said agreement clearly indicate that these contracts cannot be termed as merely a contract for providing the services of their technicians. It was a contract made for carrying out the drilling operations efficiently and profitably. He submitted a copy of Agreement dated 8-2-1985 executed between ONGC and F.F. for operation of the jack-up rig “Sagar Ratna”. He pointed out that clause 4 requires the contractor, F. F. to impart training to the personnel of ONGC in off-shore drilling. Clause 4.3 stipulates that the contract ‘Will provide transfer of drilling technology by way of seminars, group discussions and exchange of literature etc. The contractor agreed to develop and submit formal programmes of the seminars, group discussions etc. at their institute or institute of international repute, every year free of cost to ONGC personnel. Clause 6 specifies the various duties and responsibilities of the employees deployed for the drilling work assigned to them under the said contract. The contractor shall be responsible for payments of ail compensations to the said personnel including cost of taxes and fringe benefits. Clause 6.6 further provides that ONGC shall deliver its drilling programme to the contractor, The contractor after arrival at the well location and after having anchored at location shall begin immediately to prosecute the work according to owner’s drilling programme for the said well. Clause 6.7 provides that the contractor shall repair, re-drill, re-open and perform remedial operations in any well and wells designated by the ONGC. Clause 8 provides that contractor shall pay for and maintain in full force the insurance for its personnel as specified in Exhibit ‘C’ of the said Agreement. Clause 11.8 provides that rates and fees payable by ONGC to F.F. shall be firm during the entire term of the contract and no escalation shall be allowed under any circumstances. Clause 13 specifies for the responsibility of the contract at their own cost relating “toto and fro” transport for the contractor’s personnel for their transit, hotel accommodation, office accommodation and facilities as required by the contractor for his use on shore India. The technical conditions prescribed in the said Agreement clearly provides that the scope of work required to be carried out by the contractor in the said Agreement was to maintain and manage the operations of the non-propelled, self-contained, self-elevating cantilever type Jack-up rig “Sagar Ratna” for the exploration of oil and gas in the Indian waters. He submitted that a reading of the said Agreement as a whole clearly indicate that the contractors were engaged in the business of providing services or facilities in connection with the prospecting for, or extraction or production of, mineral oils. The amount received by the contractor under such agreement is, therefore, clearly covered within the ambit of section 44BB of the Act.
5.1 The learned counsel further submitted that the decision of the Hon’ble Authority for Advance Rulings relied upon by the learned Commissioner (Appeals) (DR) is clearly distinguishable on facts. In that case the non-resident company had entered into an agreement with an oil company in India for rendering consuling services for gas flaying reduction project. That type of agreement is entirely different and distinguishable with the agreement which FF had executed with ONGC for ensuring proper maintenance and management and running of the Jack-up rigs in the course of exploration of oil and gas in the Indian waters. Apart from this, the provisions of section 245-S clearly provides that the advance ruling pronounced by the Authority under section 245R shall be binding only on the applicant who had sought it in respect of the transaction in relation to which the ruling had been sought. That decision cannot be applied in respect of any other transaction entered into by the same party. Hence question at applying that decision in the case of a different assessee in relation to an agreement of entirely different nature does not arise at all.
5.2 The learned counsel further submitted that the provisions of section 44BB nowhere prescribe that the non-resident assessee should be engaged any such business in India. The decision of the Tribunal in the case of the employees/technicians of FF relied upon by the learned Commissioner (Appeals) (DR) relating to claim of exemption under section 10(6)(vi) is not at all relevant for deciding the present issue. The provisions of section 10(6)(vi) clearly require that in order to avail exemption in relation to remuneration of an employee of a foreign enterprise, it is necessary that the 3 conditions mentioned in the said provision should be fulfilled. The first condition is that the foreign enterprise is not engaged in trade or business in India. The words ‘In India’ does not find mention in section 44BB of Income-tax Act, 1961. It is, therefore, clear that M/s. FF are carrying on the business of off-shore drilling operation at a global level and possessed rich experience in this line of business and had agreed to provide the services of expatriate supervisory staff and personnel with expertise in operation and management of Jack-up rigs and also under-took to properly manage and operate the said rigs for the exploration and development of oil and gas off-shore in India. The amount received by FF under such agreement was clearly covered within the ambit of section 44BB.
5.3 The learned counsel also submitted that the payments received by M/s. FF under the aforesaid agreement from ONGC cannot treated as fee for technical services within the meaning of Explanation 2 to section 9(1)(vii). The Tribunal in a very elaborate and detailed decision dated 24th June, 1988 in the case of M/s. Scan Drilling Company has considered the aforesaid point. The Tribunal has held on the basis of identical facts and similar clauses that pith and substance of such an agreement, namely, drilling, exploration etc. of oil and natural gas falls within the ambit of mining or like project which has been specifically excluded from the definition of fees for technical services by later part of Explanation 2 to section 9(1)(vii) of the Act. It was held that the provisions of section 44BB will govern the assessability of such income and the provisions of section 44D read with section 115A will not at all apply to such income.
5.4 The learned counsel further submitted that the issue is also covered in favour of the assessee by Circular No. 202 dated 5th July, 1996 issued by the CBDT. Para 16.3 of the said Circular reported in 105 ITR 17 at page 28 (St.) is reproduced as under :-
“16.3 The expression “fees for technical services” has been defined to mean any consideration (including any lump sum consideration) for the rendering of managerial, technical or consultancy services, including the provisions of services of technical or other personnel). It, however, does not include fees of the following types, namely :-
(i) Any consideration received for any construction, assembly, mining or like project undertaken by the recipient. Such consideration has been excluded from the definition on the ground that such activities virtually amount to carrying on business in India for which considerable expenditure will have to be incurred by a non-resident and accordingly, it will not be fair to tax such consideration in the hands of a foreign company on gross basis or the restrict the expenditure incurred for earning the to 20 per cent of the gross amount as provided in new section 44D of that Act. Consideration for any construction, assembly, mining or like project will, therefore, be chargeable to tax on net basis, i.e., after allowing deduction in respect of costs and expenditure incurred for earning the same and charged to tax at the rates applicable to the ordinary income of the non-resident as specified in the relevant Finance Act.
(ii) Consideration which will be chargeable to tax in the hands of the recipient under the head “Salaries”.”
5.5 The learned counsel once again invited our attention towards various clauses in the Agreement executed between ONGC and F.F. which requires F.F. to incur various expenditures for carrying out the operating services and management of the Jack-up rigs. M/s. F.F. are liable for payment of all compensation to their personnel including cost of personal taxes and fringe benefits. They have to arrange at their cost, trips to and from nearest Airport for each of their personnel. They have to bear the cost of insurance, they have to provide training to the employees of ONGC at their cost. The aforesaid Circular is, therefore, clearly applicable on the facts of the present case, which rules out the applicability of section 44D in such cases.
5.6 The learned counsel submitted that the facts relevant to the year under consideration are absolutely identical and similar as in the immediately preceding year. The Tribunal in assessee’s own case for the immediately preceding year has decided this very issue in favour of the assessee. The Assessing Officer has himself mentioned in the assessment order that this point has been discussed in the assessment order for assessment year 1984-85 and following his findings given in the preceding year assessment year 1984-85, he decided the issue in similar manner and involved the provisions of section 44D as in the last year. Now, the Tribunal has already decided the revenue’s appeal for assessment year 1984-85 in ITA No. 5032/Del/89 vide order dated 16th March, 1995 and it has been held that receipts for exactly similar services rendered by F.F. are taxable under section 44BB and not under section 44D of the Act.
5.7 The learned counsel further submitted that such a view is also supported by the decision in the following cases :
(a) Order dated 30-5-1996 in the case of ONGC as Agent of Western Services International in ITA No. 3250/Del/90 and ONGC as Agent of Nowsco Well Services in ITA No. 3252/Del/90.
(b) Order in the case of ONGC as Agent of Western Services International in ITA No. 2492/Del/90 for assessment year 1985-86.
(c) Order of ITAT, Delhi Bench ‘B’ in the case of Agland Investment Services Inc. v. ITO [1985] 22 Taxman 9.
5.8 The learned counsel further submitted that an opinion on this point was obtained from the then Attorney General, who vide his opinion dated 13-5-90, a copy whereof has been submitted at pages 14 to 17 of the Paper Book, has clearly opined that the income derived by the foreign company M/s. Scan Drilling Company Ltd. from Contract dated 25-8-1983 for providing services of expatriate supervisory staff and personnel with expertise and experience in operation and management of “Sagar Jyoti” Jack-up Rig will be assessable under the provisions of section 44BB of the Act. Such activities will amount to activities of participating for or extractions or production of mineral oils, which can be termed as mining operations. The expression “Mining Project” or “Like Project” occurring in Explanation 2 to section 9(1)(vii) of Income-tax Act would cover rendering of services like imparting training’ and carrying out drilling operations for explorations or exploitation of oil and natural gas. It was opined that payments made by ONGC to the Contractor are not “fees for technical services as defined in section 9(1)(vii) Explanation 2 of the Act, and these payments are chargeable to income-tax under section 44BB of the Act. The learned counsel further drew our attention towards Board’s Instruction No. 1862 dated 22-11-1990, a copy whereof has been placed at page 1 of the Paper Book. The opinion of the Attorney General has been referred to in the said Instruction dated 22-11-1990. The relevant extract of the said Circular is produced hereunder :-
“The Attorney General has opined that such operations are mining operations and the expressions ‘mining project’ like project’ occurring in Explanation 2 to section 9(1)(vii) of the Income-tax Act would cover the rendering of services like the imparting of training and carrying out drilling operations for exploration or exploitation of oil and natural gas. In view of the above opinion, the consideration for such services will not be treated as fees for technical services for the purpose of Explanation 2 to section 9(1)(vii) of the Income-tax Act, 1961. Payments for such services to a foreign company, therefore, will be income chargeable to tax under the provisions of section 44BB of the Income-tax Act, 1961 and not under the special provisions for taxation of fees for technical services contained in section 115A read with section 44D of the Income-tax Act, 1961.”
5.9 The learned counsel on the strength of the aforesaid earlier decisions of the Tribunal, opinion of the learned Attorney General and the Instructions issued by the CBDT on the basis of the said opinion urged that the view already taken by the Tribunal in assessee’s own case for the immediately preceding year should be followed. He thus strongly supported the order of the Commissioner (Appeals).
6. We have carefully considered the submissions made by the learned representatives of the parties, have perused the orders of the learned Departmental Authorities, have gone through all other relevant documents and decisions to which our attention was drawn during the course of hearing.
6.1. A perusal of the provisions of sections 44D and 115A makes it clear that these are special provisions for computing and taxing income by way of royalty or fees for technical services in the case of foreign companies. Section 44D starts with an overriding expression “Notwithstanding anything to the contrary contained in sections 28 to 44C”. This means that section, 44D takes precedence over sections 28 to 44C and override these provisions. The Proviso to section 44BB excludes the application of that section to, cases covered by section 42 or section 44D or section 115A or section 293A applies for the purposes of computing profits or gains or any other income referred to in those sections. This clearly means that section 44BB is also superseded by section 44D in respect of computation of income by way of royalties or fees for technical services received by the non-resident foreign companies from an Indian concern.
6.2 In order to examine whether the provisions of section 44D read with section 115A on the facts of the present case supersedes and overrides the provisions of section 44BB, it will be necessary to examine the nature of amount received by the foreign company pursuant to the relevant Agreements executed with ONGC. It will have to be ascertained whether the amounts received by the FF are in the nature of ‘fees for technical services’ defined in Explanation 2 to section 9(1)(vii) of the Act.
6.3 Explanation 2 to section 9(1)(vii) of the Act is reproduced here-under :-
“Explanation 2 – For the purposes of this clause, ‘fees for technical services’ means any consideration (including any lump sum consideration) for the rendering of any managerial, technical or consultancy services (including the provisions of services of technical or other personnel) but does not include consideration for any construction, assembly, mining or like project undertaken by the recipient or consideration which would be income of the recipient chargeable under the head ‘Salaries’.”
6.4 The learned CIT(DR) relied upon the decision of Authority for Advance Rulings, New Delhi, namely, Advance Ruling petition (supra). In that case the appellant-company incorporated in UK entered into 3 Agreements with an oil company in India for rendering consulting services for gas flaring reduction project etc. The Hon’ble Advance Rulings Authority in the said judgment at page 230 has observed that the appellant-company has only surveyed the area earmarked by the oil company of India and has given the technical designs and know-how to enable the oil company to perform the mining job itself. On its own showing the applicant has not done any job of mining, nor has it provided any equipment or crew therefor. The facts of this case are, therefore, different and, in any view of the matter, the applicant does not get excluded by the last clause of Explanation 2 to section 9(1)(vii). It was argued on behalf of the applicant company in the aforesaid matter that if the special provisions like 44D is interpreted in a manner that any consideration for rendering of any technical or consultancy services, etc. will come within the meaning of expression ‘fees for technical services’ under the aforesaid Explanation, it will render section 44BB altogether redundant. The Hon’ble Authority for Advance Rulings in para 16.2.2 of the said judgment, inter alia, observed as under :-
“16.2.2 It was sought to be made out that the above interpretation will render section 44BB altogether redundant. This is not correct for section 44BB will continue to apply to several types of cases in relation to the prospecting for or extraction or production of mineral oils. It is possible to conceive of services or facilities provided in this connection the consideration for which may not amount to ‘royalty’ or ‘fees for technical services’ within the scope of the definition in section 9(1)(vi) and (vii). Consideration for the supply of plant and machinery on hire referred to in section 44B will not be in the nature of ‘royalty’. Consideration for any construction, assembly, mining or like project is excluded from the compass of the definition of ‘fees for technical services’ within the meaning of Explanation to section 9(1)(vii). There is, therefore, a wide range of income falling under section 44BB which will not fall within section 44D. The exclusion of royalty and fees for technical services from the scope of section 44BB will not, therefore, render section 44BB otiose or redundant, as suggested.”
6.5 It is, therefore, clear that section 44BB will continue to apply to several types of cases in relation to the prospecting for or extraction or production of mineral oils which fall within the excluded category and may not amount to “royalty” or ‘fees for technical services’ within the scope of the definition in Explanation 2 to section 9(1)(vii). The facts of that case clearly reveal that the appellant company in that case has not done any job of mining nor has it provided any equipment or crew for carrying out the work of mining or like project. The facts of the present case, as is evident from the various clauses of the respective Agreements elaborately discussed hereinbefore, clearly indicate that the aforesaid decision of the Authority for Advance Rulings is clearly distinguishable on facts.
6.6 The learned CIT (DR) had also placed reliance on the decision of the Tribunal in the case of employees/technicians of M/s. F. F. in ITA No. 7438/Del/89 & Ors. That was a decision dealing with the nature of the receipt in the case of the employees of the foreign company and related to their claim for exemption under section 10(6)(vi) of the Act. The provisions of section 10(6)(vi) are different than the provisions of section 44BB of the Act. This does not in any manner support the revenue’s case so far as the case of the foreign company is concerned.
6.7 The Tribunal has decided the identical cases involving interpretation of the various identical clauses of Agreements executed by ONGC that (sic) M/s. Scan Drilling Co. and other foreign enterprises. Similar issues have been decided by the Tribunal in favour of the assessees by holding that such Agreements in pith and substance are Agreements meant for drilling, exploration etc. of oil and natural gas and fall within the ambit of “mining or like project” being some of the matters excluded from the definition of “fees for technical services” by the later part of Explanation 2 to section 9(1)(vii) of the Act. It has been held by the Tribunal in the case of ONGC as Agent of M/s. Scan Drilling Company in ITA No. 6147/Del/87 that the payments made by the ONGC to the Contractor in terms of similar Agreements are income chargeable to income-tax under the head ‘Profits and gains of business’ and attract provisions contained in section 44BB for computing profits and gains in connection with the business of exploration etc. of mineral oils. It has further been specifically held that such payments fall within the matters excluded from the definition of “fees for technical services” as defined in the said Explanation. Hence, special provisions contained in section 44D read with section 115A for computing income by way of fees for technical services in the case of foreign companies and tax payable on such income do not apply in such matters. Such a view was taken by the Tribunal in various other decision relied upon and referred to by the learned counsel for the assessee.
6.8 The aforesaid view taken by the Tribunal in the case of M/s. Scan Drilling Company is also clearly supported by the opinion dated 13-5-1990 of Shri Soli J. Sorabjee, the then Attorney General of India and also by the Instruction No. 1862 dated 22-10-1990 issued by the CBDT. The Assessing Officer has himself invoked the provisions of section 44D read with section 115A in the year under consideration by following the decision in assessee’s own case for the immediately preceding year assessment year 1984-85. The Commissioner (Appeals) accepted the assessee’s contention and held that provisions of section 44D is not applicable and the income of the assessee is assessable under section 44BB as business income. The revenue’s appeal against the said order in assessee’s own case for assessment year 1984-85 in ITA No. 5032/Del/89 has been dismissed by order dated 16-3-1995. The aforesaid point is, therefore, fully and squarely covered in favour of the assessees by the above referred decision of the Tribunal in assessee’s own case for assessment year 1984-85. The view taken by the Tribunal is also fully supported by the various other decisions in similar matters, as have been referred to by the learned counsel for the assessee. We have gone through the copies of all those decisions of the Tribunal rendered in other cases involving consideration of exactly similar point based on identical facts. We do not find any merit in the contention of the learned CIT(DR) that the matter requires a fresh look and reconsideration. The rule of consistency has received judicial recognition in various judgments such as the one Dhansiram Agarwalla v. CIT [1996] 217 ITR 4 (Gauhati). The above referred earlier decision of the Tribunal rendered in favour of the assessees and in other similar cases is also fully supported by the Instruction No. 1862 dated 22-10-1990, based on the opinion given by the learned Attorney General of India and which, in our view, is in conformity with the relevant provisions of law. We, therefore, do not find any justification for taking a view different than the view taken by the Tribunal in assessee’s own case for the immediately preceding year. In our view, the Revenue’s appeal has no merit.
7. Before parting, we would like to observe that Shri S. N. Bhargava, the learned CIT (DR) and Shri Kavesh Syal, the learned counsel appearing on behalf of the assessee presented their respective arguments in an admirable manner.
8. In the result, the Revenue’s appeal is dismissed.
