OHM LIMITED Vs. DIRECTOR OF INCOME TAX

JUDGEMENT

(1.) THE applicant, OHM Limited, is a company incorporated under the laws of United Kingdom and is a tax resident of United Kingdom. It provides geophysical services to oil and gas exploration industry. It conducts electromagnetic surveys, processing and interpretation of data so acquired through such surveys for offshore oil industry. Petrogas E&P, LLC has awarded contract to the applicant for provision of Marine Magneto Telluric and Transient Electro Magnetic (MMT/TEM) data acquisition, processing and interpretation services in respect of an offshore exploration block MB -OSN -2004/2 in India. The applicant states that these MMT/TEM survey is electromagnetic geophysical method of imaging the earth's subsurface. Data acquired through such surveys is further processed using specialized software to get the information about existence of hydrocarbons underneath. The entire process starting from conducting the survey and then processing and interpretation of data acquired through survey is driven towards assisting the oil and gas clients in their exploration operations. The services are part of the exploration/prospecting activities for mineral oil and clearly fall under the ambit of Section 44BB of the Act. The applicant further states that for the purposes of conducting seismic surveys, the vessel is mobilized from outside India to the site area in India where the work is to be carried out. Similarly, when the vessel is demobilized, after completion of the work, it involves moving out of equipment and personnel from the site area. The applicant is paid for mobilization as well as demobilization of its vessel from site area. In its view, the mobilization/demobilization revenues taxable in India should be restricted only to the revenues attributable to the distance travelled in the Indian territorial waters as compared to the total distance travelled to/from India.

(2.) ADVANCE ruling is sought on the following questions framed by the applicant:

(3.) IN response, applicant has stated that this Authority had the occasion to examine the issue in the case of Geofizyka Torun Sp.zo.o, in AAR/813 of 2009, 320 ITR 268 wherein this Authority, after a detailed discussion, held the view that: