BERGEN OILFIELD SERVICES Vs. DIRECTOR OF INCOME TAX

JUDGEMENT

(1.) THE applicant, Bergen Oilfield Services AS, is a company incorporated under the laws of Norway and a tax resident of Norway. It provides geophysical services to oil and gas exploration industry. It conducts seismic surveys and provides onshore seismic data acquisition and other associated services. Cairn Energy Pvt. Limited (Cairn), India, has awarded contract to the applicant to carry out 3D Marine Seismic Data Acquisition services in PR -OSN -2004/1 Block located in the offshore coastal areas in the states Andhra Pradesh and Tamil Nadu. The applicant states that the services rendered by it will be utilized by the Cairn in its oil exploration and production activities. It is submitted that seismic survey is the first step and most critical part of any oil and gas exploration activity. The services are part of the exploration/prospecting activities for mineral oil and falls under the ambit of Section 44BB of the Income -tax Act, 1961(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 the 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.) THE issue had arisen in the case of Geofizyka Torun Sp.zo.o, in AAR/813 of 2009, wherein this Authority after a detailed discussion held the view that: