IN RE: ROXAR MAXIMUM RESERVOIR PERFORMANCE WLL, THE WIND TOWER, 7TH FLOOR, OFFICE NO. 71 P.O. BOX NO. 10838, MANAMA, KINGDOM OF BAHRAIN Vs. STATE

JUDGEMENT

(1.) THE Oil and Natural Gas Corporation Limited, hereinafter referred to as ONGC, floated a tender calling for "services for supply, installation and commissioning of 36 manometer gauges" for carrying out its operations. The applicant was the successful bidder. ONGC and the applicant entered into a contract on 7.10.2009. In the contract ONGC is described as "Corporation" and the applicant is described as "Contractor". It will be profitable to set down the terms of the contract at this stage.

(2.) THE applicant approached this Authority with a plea that it had entered into a contract with ONGC for supply of manometer gauges, that the title to the goods passed outside India, that the payment therefor was received outside India and that the transaction of sale was not taxable in India. While allowing the application under section 245R(2) of the Income -tax Act, 1961 (Act), this Authority framed the following three questions for giving a ruling: -

(3.) IT is argued on behalf of the applicant that the contract was an offshore supply contract, that the title to the goods passed to ONGC offshore, that the payment was received by the applicant offshore and that the taxing authorities under the Income -tax Act had no jurisdiction to tax the transaction in its entirety. The income to the applicant by the sale did not accrue or arise in India. Nor can it be deemed to have accrued or arisen in India. Learned counsel for the applicant placed heavy reliance on the decisions of the Supreme Court in Ishikawajima -Harima Heavy Industries Ltd. vs. DIT : [(288 ITR 408) (SC)], CIT and another vs. Hyundai Heavy Industries Company Ltd. : [(291 ITR 482) (SC)], on the Ruling of this Authority in Hyosung Corporation vs. DIT (AAR 773 of 2008) and other decisions.