- (1.) The appeals are by the Revenue. The assessee is non-resident company. In respect of the asst. yrs. 1983-84, 1984-85 and 1986-87, the appeals arise out of the orders passed by the ITO under S. 154 of the IT Act. In respect of the asst. yr. 1987-88 the appeal arises out of the assessment made under S. 143(3) of the IT Act.
(2.) The assessee entered into contracts with ONGC and Oil India Ltd. (OIL). These contracts related to certain services to be rendered by the assessee in respect of on-shore exploratory wells owned by ONGC and OIL located in the eastern and central region of India. The contract with ONGC was made on 21st Feb., 1985. The contract with OIL was made on 26th Nov., 1987 to take effect from 1st Jan., 1986. The assessments for the asst. yrs. 1983-84, 1984-85 and 1986-87 were made prior to the introduction of S. 44BB of the IT Act by the Finance Act, 1987, which made the said section applicable with retrospective effect from 1st April, 1983, i.e., from the asst. yr. 1983-84 onwards. In the assessments, apparently the income of the assessee had been computed applying the normal provisions of the IT Act applicable for income from business. The assessee, pursuant to the introduction of S. 44BB, moved applications before the ITO under S. 154 of the Act praying for rectification of the assessments by applying the provisions of S. 44BB. The applications were rejected by the ITO by orders dt. 30th March, 1990. On the same day, the assessment for the asst. yr. 1987-88 had been completed under S. 143(3) of the Act. In the course of that assessment, the assessee had claimed that the provisions of S. 44BB were applicable to the computation of its income. The ITO for reasons stated in the assessment order for the asst. yr. 1987-88, had rejected the assessees claim. He applied the provisions of S. 115A of the Act r/w S. 44D(b) of the Act. While rejecting the assessees request for applying the provisions of S. 44BB to the computation of its income for the asst. yrs. 1983-84, 1984-85 and 1986-87, the ITO relied on the reasons given by him in the assessment order for the asst. yr. 1987-88.
(3.) The CIT(A) to whom the appeals were preferred by the assessee, accepted the assessees contention and directed the computation of the income for all the years under S. 44B of the Act.;