Ship or vessel supplied on hire for being used in prospecting operation of exploration of mineral oil- second limb of Section 44BB was clearly attracted - AAR
THE question before the AAR was whether the operations of seismic survey and related services is an integral part of the exploration/prospecting activities for mineral oil (petroleum and natural gas) and, therefore, they fall under the ambit of Section 44BB of the IT Act and the income has to be computed in accordance with that provision. An identical issue has already been decided by the AAR in 2009-TIOL-32-ARA-IT. It was held again that the second limb of Section 44BB was clearly attracted for the reason that the ‘plant and machinery' which includes a ship or vessel has been supplied on hire for being used in the prospecting operation of exploration of mineral oil and tax has to be withheld from the payments made by the applicant would be 4.223%.