NR OIL EXPLORATION |
Question (ID 033) (Oil Exploration 44BB)
ONGC has agreements (approved by the Government) with the following three foreign companies which provide services and facilities to ONGC in connection with prospecting for (or extraction / production of) mineral oils in India-
| A Inc. | B Inc. | C Inc. |
Due of agreement | June 10, 1982 | June 10, 1992 | June 10, 2002 |
Amount paid by ONGC on account services provided by foreign companies. | 90 crore | 90 crore | 90 crore |
Tax liability borne by ONGC (in Rs.) | No | Yes | Yes |
Find out the taxable income and tax liability of the foreign companies. Discuss whether tax liability borne by ONGC would be perquisite arising to B Inc. and C Inc. under section 28(iv) and would be taxable separately in addition to income computed under section 44BB. You are also required to ascertain amount of taxes to be paid by ONGC for C Inc and offer your comments.
Problem (Head office expense) (ID 34)
The net result of the business carried on by a branch of foreign company in India for the year was a loss of 100 lacs after charge of head office expenses of 200 lacs allocated to the branch. Explain with reasons the income to be declared by the branch in its return.