In Brief
Non-resident contractors engaged in mineral oil exploration in India received mobilisation fees for transporting drilling rigs from foreign locations to Indian offshore sites. The Supreme Court held that these fixed mobilisation fees must be included in gross receipts under Section 44BB(2)(a) of the Income Tax Act, 1961, on which 10% is charged as presumptive income. Though Section 44BB is a special computation provision, it operates within the framework of the Act's charging sections (Sections 4, 5, 9). The Court clarified that amounts specified in Section 44BB(2) are deemed income for tax purposes. However, compensation for actual loss of the operator's tools (not relating to services or plant supply) falls outside Section 44BB and is not taxable. The assessees' appeals (except the Revenue's appeal on the tools-loss issue) were dismissed.
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