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TMI Blog2007 (11) TMI 610X X X X Extracts X X X X X X X X Extracts X X X X ..... r has taken a view in favour of the assessee. The law requires the view to be erroneous and that has not been substantiated by learned counsel for the revenue . Deduction u/s 80-IA(3) - We find that under section 148 of the Act, the assessing officer had specifically mentioned in the reasons recorded that he was prima facie of the view that the vessel had been used in the Indian territorial waters prior to its acquisition by the assessee. A response was given by the assessee to the notice in which it was categorically mentioned that the ship was never used in India so deduction u/s 80-IA(3) could not be denied to the assessee. In all the three issues that have been urged by learned counsel for the revenue , no substantial question o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... andum and articles of association of the assessee, one of its main objects is to purchase, charter, hire, build or otherwise acquire, ships and to employ the same. He further noted that a contract was entered into by the assessee with the Oil and Natural Gas Commission (hereinafter referred to as 'ONGC') where besides drilling equipments, the ONGC required various other facilities for offshore drilling like helipad, three level quarters with accommodation for 75 persons, dining and recreation facilities, hospital, etc. He noted that these facilities are normally provided in a ship and the Deep Sea Matdrill was in fact a ship, which was used for offshore drilling for the exploration of oil. It was also noted that the objects and re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 80-IA(3) of the Act, which reads as follows : 80-IA. Deduction in respect of profits and gains from industrial undertakings etc. in certain cases : (1) . (2) . (3) This section applies to any ship, where all the following conditions are fulfilled, namely : (i) it is owned by an Indian company and is wholly used for the purposes of the business carried on by it; (ii) it was not, previous to the date of its acquisition by the Indian company, owned or used in Indian territorial waters by a person resident in India; and (iii) it is brought into use by the Indian company at any time during the period beginning on the 1-4-1991 and ending on the 31-3-1995. (4)to (12) 10. A reassessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laced on a ship, which can be moved out. Insofar as the present case is concerned, it does appear quite clearly that the drilling rig was placed on a vessel described as a barge, which could be moved out from place to place for offshore drilling. The Tribunal considered this aspect of the matter and came to the conclusion (with which we do not find any fault) that the 'Deep Sea Matdrill' is nothing but a ship. It is a barge, which can be moved from place to place like any other ship. When the drilling rig is in use, then apparently to save some expenses the ship's propeller is removed; but whenever it is required to be shifted, the propeller is refixed and the ship is made mobile. On merits, therefore, we are of the view that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had specifically mentioned in the reasons recorded that he was prima facie of the view that the vessel had been used in the Indian territorial waters prior to its acquisition by the assessee. A response was given by the assessee to the notice in which it was categorically mentioned that the ship was never used in India so deduction under section 80-IA(3) could not be denied to the assessee. 18. The assessing officer in the reassessment order did not deal with the issue apparently because he was satisfied with the explanation given by the assessee. 19. Learned counsel for the revenue relied upon a decision of this court in Gee Vee Enterprises v. Addl. CIT Ors. [1975] 99 ITR 375 (Del) to contend that it is the duty of the Income Tax O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Tribunal has not erred in interpreting section 80-IA(3) of the Act in favour of the assessee. 23. The last issue addressed by learned counsel for the revenue relates, to section 80-IA(4) of the Act (as it now stands). This provision requires that any enterprise, carrying on the business of developing, operating and maintaining any infrastructure facility must fulfill the condition that it starts operating and maintaining such infrastructure facility on or after the 1-4-1995. 24. Insofar as this is concerned, a bare reading of section 80-IA(4) of the Act shows that what is required to be determined is essentially factual and there is no legal issue which is involved, much less a substantial question of law. 25. We also find that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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