9911796707
TMI Blog2017 (9) TMI 1576X X X X Extracts X X X X X X X X Extracts X X X X ..... ring contract. Signature bonus was received by the assessee in lieu of the transfer of 60% of rights in the oil fields, as such, by no stretch of imagination could it be said that the receipts on that account would be to receive the compensation for loss or profit. Under the joint operation agreement ONGC surrendered 60% of the rights to the other companies agreeing to receive signature bonus. We, therefore, hold that the amount of ₹ 219.76 crores received by ONGC is for transfer of 60% of shares in the Revenue yielding oil fields, as such, is capital in nature. Here in this case, the transfer was in the nature of slump sale and as is held by the Hon’ble Apex Court in PNB Finance Ltd. (2008 (11) TMI 7 - SUPREME COURT) referring to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ehradun (hereinafter for short called as the Ld. CIT (A) ), on the following grounds: 1. The Ld.CIT (Appeals) erred in law and on facts in holding that the income arising from transfer of petroleum exploration/mining rights by ONGC to certain private companies was assessable not under the head Profit Gains of business or profession but under the head Capital Gains . Since the cost of acquisition of the rights had been claimed as revenue expenditure, the consideration accruing on transfer of the same had been correctly treated as revenue receipt and taxed as part of profit of business by the AO. 2. Even while holding that the income arising from transfer of petroleum exploration/mining rights by ONGC to certain private compa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompanies paying the assessee in consideration of the right to commence and carried out exploration and drilling activities. Assessee agreed with the other companies to receive 40% of the share in the production and in addition to the sum of certain amounts depending upon the achievement of certain level of production. During the AY 1995- 96, assessee received a sum of ₹ 219.76 crores as Signature bonus for demitting 60% share in the oil fields and the AO treated the same as Revenue receipt and brought it to tax. However, in appeal Ld. CIT (A) held that the transfer by the assessee was a Revenue yielding asset i.e. the oil mines and that any transfer of capital asset would lead to capital gain or capital loss but in so far as this pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... receive 40% of signature bonus does not result in any capital gain in as much as, as observed by the Ld. CIT (A) as against the 60% of shares in the oil fields book worth of which is about 882.86 crores, the assessee received only a sum of ₹ 219.76 crores. Secondly, he submitted that here what was transferred was an ongoing concern with all the lock, stock and barrel including the employees and all other attendant and ancillary maters, as such, this type of slump sale transaction cannot be brought to tax because there were no computation provisions prior to 1.4.2000 that could be brought to tax as capital gains the consideration received in slump sale. He placed relied on the decision reported in PNB Finance Ltd. vs. Commissioner of I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is held by the Hon ble Apex Court in PNB Finance Ltd. (supra) while referring to the decision in CIT vs. B.C. Sriniwas Shetty (1981) 128 ITR 294, and holding that the ratio of Artex Manufacturing Co. (1997) 227 ITR 260 (SC) has no application to the facts of the case and prior to 1.4.2000 there was no computation provision that could be brought to tax as capital gains the consideration received in slump sale. The Hon ble Jurisdictional High Court followed this principle in CIT vs. DLF Ltd. (supra). While respectfully following the same, we are of the considered opinion that the amount of ₹ 219.76 crores received by the assessee as signature bonus for demitting 60% shares in the three oil fields cannot be brought to tax. Even otherwis ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
