ORDER

PER BENCH:

Challenging the impugned orders passed by the learned DRP/learned Commissioner of Income Tax (Appeals), three appeals, being ITA Nos.5863 & 5864/Del/2101 and 441/Del/2012, are filed by the Oil and Natural Gas Corporation (ONGC) (hereinafter referred to as the assessee) and ITA No.4982/Del/2011 is filed by the revenue.

2. Common issue involved in all these appeals relates to taxability of the receipts of non-resident in India as fees for technical services as per the provisions of the DTAA with respective countries or as per the provisions of section 44 BB of the Income-tax Act, 1961 (for short “the Act”). We therefore find it just and convenient to dispose of these matters by way of this common order.

3. Facts, in brief, are that the assessee made certain payments to the non- residents, namely, Shell International Exploration & Production BV (Netherlands), J.P.Kenny Pty. Ltd (Australia), Boots & Coots International Well Control Inc (USA) and National Mining Research Centre (Russia) in relation to the business of prospecting, exploration and production of mineral oil carried out by the assessee, and the receipts were claimed to be exempt from tax under the relevant provisions of the DTAA existing between India and the respective foreign country while filing the return of income. In the alternative and without prejudice to the claim of being governed by the DTAA with respect to foreign country, the receipts were claimed to be taxable under section 44BB of the Act.

4. The authorities below treated the aforesaid payments as in the nature of ‘Fee for Technical Services’ (FTS) within the meaning of section 9(1)(vii) of the Act read with section 115A of the Act and held that such payments were taxable in India and on that basis they held that the aforesaid payments were taxable as FTS under section 115A of the Act and the same are outside the purview of presumptive taxation under section 44BB of the Act in view of the proviso thereto.

5. On these facts, argument of the Ld. AR is two-fold. Firstly, in cases where trade is applicable, which contains the condition of ‘make available’ under article dealing with ‘Fee for Technical Services’ (FTS), the impugned ‘Fee for Technical Services’ (FTS) would be taxable in India only if the non-resident recipient‘make available’the technology/skill/know-how to the recipient, which is ONGC in the present case, enabling the ONGC to apply such knowledge in future. For this proposition he placed reliance on the decisions in DIT vs. Guy Carpenter& Co. Ltd 346 ITR 504; CIT vs. De Beers India minerals (P.) Ltd 346 ITR 467; DDIT RSS ONGC in ITA No. 4989/mum/2012; KPMG vs. ACIT in ITA No. 6286/mum/2012; ACIT vs. BSR and company 70 taxman.com 69.

6. He further submitted that in the case of ONGC, the vendor had only provided services mainly in the nature of survey report/feasibility study reports to the ONGC and did not make available the skill/know-how used in rendering such services and on that ground such services did not satisfy the condition of ‘make available’ contained in the relevant article of the treaty. Basing on this, he submitted that in the options of services satisfying the condition of ‘make available’, fee for such services will not be taxable in India as per the relevant articles of the treaty relating to ‘Fee for Technical Services’ (FTS) under the treaty, and accordingly in the absence of non-resident having permanent establishment in India, the fee for it would not be taxable in India as business income, as is held by a decision of the Mumbai bench of the tribunal in the case of DDIT vs ONGC (ITA No. 4989/Mum/2012).

7. The alternative argument of the Ld. AR is that the contention of the authorities below that the impugned payments are in the nature of FTS within the meaning of section 9(1)(vii) of the Act and consequently, not taxable under section 44BB of the Act, has clearly been covered by the decision of the Hon’ble Apex court in the case of ONGC vs. C.I.T. 376 ITR 306, wher