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"The work consists of building a standard vertical separation frame at the point where two pipelines intersect. Micoperi will build pipeline crossings in accordance with the relevant specifications, in the following positions.

All required materials such as sandbags, markers etc., as per ONGC specifications will be provided by Micoperi. Prior to installing the sand bags, marker etc., Micoperi shall perform the sea bottom visual inspection with divers of crossings at his care and cost."

Thus, the learned Departmental Representative argued that the services were being rendered by the assessee directly to ONGC though it was appointed as sub-contractor by HHI. Therefore, the services rendered by the assessee are covered by the aforesaid Notification of the Government of India. Whether the work falls under the Notification or under Section 44BB of the Act, the learned Departmental Representative invited our attention to the decision of the Delhi Bench of the Tribunal in the case of McDermott International Inc. v. Dy. CIT (1994) 49 TTJ (Del) 301. In the aforesaid case, the Tribunal held that "Notification No. 5147, dt. 31st March, 1983 has extended the scope of Indian Income-tax to the Continental Shelf of India and the Exclusive Economic Zone of India w.e.f. 1st April, 1983 with the only rider that it shall apply only in respect of income derived by every person from all or any of the activities specified in the said Notification. The Notification states that it is restricted to the income derived by every person from it or any of the activities carried on within the Continental Shelf and Exclusive Economic Zone of India. The stated activities are prospecting for or extraction or production of mineral oils, the provision of any services or facilities or supply of any ship, aircraft, plant or machinery (whether by way of sale or hire) in connection with any activities, namely, prospecting for, extraction or production of mineral oils. The prospecting for or extraction or production of mineral oils or natural gas in high seas requires digging of deep sea wells and their construction followed by laying of pipelines for drawing of mineral oil or natural gas and other engineering constructions like platform and many other ancillary related thereto, These constructions are the basic infrastructure required without which carrying out any of the three activities described in the Notification is impossible. These construction works form the foundation for enabling the carrying out of the three activities and are directly connected with those activities. There is no denial that these construction works do not by themselves lead to the prospecting or extraction or production but it is also not denied that without these basic structures, none of the three activities can be carried out. The Government of India with a view to augment its oil resources had decided to proceed with the prospecting, extraction and production of oil from Bombay High. In this connection, it requires services, equipments etc., of persons who are familiar with these activities and had invited them.

Therefore, the intention being so clear to hold that the services and facilities provided in connection with the activities is to cover post construction works only would defeat the very intention. The intention in the present case is to engulf into the tax net, the income derived from prospecting, extraction and production of mineral oil and natural gas and income derived in the rendering of services or provisions of facilities that include supply of ship, aircraft, plant and machinery in connection with all the three activities. There is no warrant for excluding of the operation of works before the commencement of any of three main activities, unless it has been so specifically provided that it is intended only to include in its purview the works of services and facilities related to the actual prospecting, extraction and production, The emphasis is on the words 'in connection with any activity' and it would only mean that everything that is connected with any of the three activities. The facilities provided by the assessee are linked or related to the activities and/or to associate with three activities because the three activities could not be carried out in isolation without the aid of these facilities. It is but clear that the Notification covers all or any activities that involve rendering of any services or provision of any facilities that assist or aid in the prospecting, extraction or production of mineral oil and natural gas. There is no ambiguity in the Notification and therefore, two interpretations not being possible, the view favourable to the assessee could not be taken. Sub-clauses (a) and (b) of Section 44BB contain the words 'used or to be used' which clearly indicate that words 'services or facilities rendered or provided in connection with the three main activities are meant to include both before the actual operation and during the operation of prospecting for or extraction or production. Therefore, there is absolutely no doubt that the works of construction that are in the nature of facilities provided in connection with the prospecting, extraction or production though before actual operation or prospecting etc., are duly covered and are rightly considered for liability of tax under Section 44BB. The Tribunal thus concluded that the assessee engaged in laying down basic structure without which the work of prospecting, extraction and production of mineral oil would not be possible, its activities are, therefore, covered by the abovesaid Notification No. 5147, dt. 31st March, 1983 and Section 44BB. The learned Departmental Representative thus contended that the case of the assessee is squarely covered with the aforesaid case of McDermott International Inc. (supra). He also contended that the case of National Petroleum Construction Co. Ltd. (supra) referred by the learned counsel cannot be relied upon as the same had been decided without discussing the above case of McDermott International Inc. (supra) as the same perhaps was not brought to the notice of the Tribunal though the same was available at the relevant time. He also respectfully differed with the findings of the Tribunal that "To execute a special work does not tantamount to providing services". The learned Departmental Representative further argued that Section 44BB is a special provision. He referred to the case of Dy. CIT v. Geo Services Eastern Inc. (1995) 55 ITD 227 (Bom) of Bombay Tribunal wherein the Tribunal has brought out the intention of the legislature on pp. 231 and 232. He also referred to Clause 11 of "Notes on Clauses" of Finance Bill, 1987, [(1987) 165 ITR 125 (St)]. The Clause 11 pertains to the insertion of a new Section 44BB in the IT Act which reads as follows :

9. The learned counsel for the assessee in rejoinder contended that what is binding is the ratio of the judgment and not the conclusion at the bottom. He thus argued that the cases relied upon by the learned Departmental Representative of McDermott International Inc. (supra) and Lloyd Helicopter International Pty. Ltd. (supra) are not applicable to the facts of the present case. He contended that providing services is different from execution of services. In this connection, he referred to the provisions of Sections 194J and 194C of the Act wherein two different nature of works are mentioned which are statutorily recognised. According to him, in the case of McDeimott International Inc. (supra), this issue had not been considered. Therefore, this case is not applicable to the facts of the present case as the same issue was not before the Court. He also argued that the case of Lloyd Helicopter International Pty. Ltd. (supra) is inapplicable because in the aforesaid case, services were rendered but in the present case, the assessee had rendered services in the construction activity as sub-contractor. He further argued that the income has not been derived directly from the prospecting for or extraction or production of mineral oil. Therefore, the abovesaid Notification is of no application to the facts of this case.

16. The learned counsel referred to the case of CIT v. Thana Electricity Supply Ltd. (supra) and contended that the precedents are binding. He also argued that what is binding is the ratio and not the conclusion at the bottom. According to him, providing services is different from execution of services. In this connection, he referred to the provisions of Section 194J and Section 194C wherein two different nature of works are mentioned. Section 194C pertains to carrying out any work whereas Section 194J pertains to providing services. Thus, he contended that carrying out any work is different from providing services. According to him, in the case of McDermott International Inc. (supra) services were provided but in the case of National Petroleum Construction Co. Ltd. (supra), the subcontractors carried on the work for the main contractors and did not provide any services. Therefore, he contended that the assessee's case is squarely covered with the case of National Petroleum Construction Co. Ltd. (supra) and the case of McDermott International Inc. (supra) is not applicable. The assessee was only a sub-contractor to HHI and MDL and he did not provide any services directly to ONGC. The learned counsel placed his reliance on the case of Thane Electric Supply Ltd. (supra) to support his contention. He also referred to the case of CIT v. Modu Timblo (1994) 206 ITR 647 (Bom), wherein the Bombay High Court has held "The principle of diversion of income by overriding title is not applicable, It will not be proper to try to apply the principle of ejusdem generis to give the same restricted meaning to the newly introduced expression 'BOI' as has been given by the Supreme Court to 'AOP' on the interpretation of the word 'association'. The fact that both the expressions are placed under the common item does not justify such restricted interpretation. The expression 'BOI' must receive a wider interpretation than the 'AOP'." We do not find any force in the arguments of the learned counsel and the cases referred by him have also no application to the facts of the present case. In the present case, as we have mentioned earlier, the assessee had rendered services which are intrinsically connected with the prospecting, extraction or production of mineral oil by the ONGC. Therefore, the assessee is covered by the Notification issued by the Government of India. The issue involved in the present case is exactly similar to the issue involved in the case of McDermott International Inc. (supra) relied upon by the Department. The Notification states that it is restricted to the income derived by every person from all or any of the activities carried on within the Continental Shelf or Exclusive Economic Zone of India. The said activities are for prospecting for or extraction or production of mineral oils, the provision of any services or facilities or supply of any ship, aircraft, machinery or plant in connection with any activities namely, prospecting for, extraction or production of mineral oil. The prospecting for or extraction or production of mineral oil in High seas requires digging up of deep sea wells and their construction followed by laying of pipeline for drawing the mineral oil or natural gas and other engineering constructions like laying platforms and many other ancilliaries related thereto. These structures are the basic infrastructure required without which carrying out any of the three activities described by the Notification is impossible, These construction works form the foundation for enabling the carrying out of the three activities and are directly connected with those activities. Without the extension of these basic structures, none of the three activities could be carried out. In the present case, the assessee has earned income in the rendering of services of transportation, installation of platforms, raisers, pipe laying and testing site services, etc., which are in connection with any of the three activities. Therefore, there is no warrant for excluding the operation of various items of work performed by the assessee for prospecting, extraction or production of mineral oil. In the present case, services rendered by the assessee are closely linked with or related to the three activities. Therefore, the Notification covers all or any activities that involve rendering of any services or provision of any facility that assist or aid in prospecting for or extraction or production of mineral oil. But for the services rendered by the assessee, it would not have been possible to carry out either of the three activities. Therefore, there is a direct and close connection between the services rendered by the assessee and the three main activities. The facts of the present case are, therefore, exactly similar to the facts of the case McDermott International Inc. (supra). Therefore, there is no doubt about the application of the Notification to the facts of the present case.