· The assessee was engaged in providing services and facilities in connection with exploration and production of mineral oils and received revenue against the work executed with different companies.
· The assessee filed return of income under section 44BB(1) on the premise that it was engaged in providing of services and facilities in connection with, or supplying plant and machinery which were used, or to be used, in the prospecting for, or extraction or production of, mineral oils.
· The Assessing Officer did not accept the stand of the assessee company and applying the provisions of section 115A/44DA computed the incomes of the assessee under section 28.
· The assessee also offered interest received on IT refund for taxation at the rate of 15% as per article 12 of DTAA, between India & UK.The AO did not accept the assessee's stand and applied tax rate of 40% as per normal provisions of the Act.
· It was contended by the assessee that the interest on income tax refund is covered under Article No. 12 of the DTAA, according to which the interest on refund is taxable @ 15%.
· The Hon’ble Tribunal, however, concluded that the interest on income tax refund, in assessee’s case, is taxable @ 40% and will not fall under the Article No. 12 of the DTAA of the India-Uk treaty.
For further reading, refer the attachment.