9911796707
TMI Blog2018 (11) TMI 1319X X X X Extracts X X X X X X X X Extracts X X X X ..... quishment of 7,300 sq.kms. area in PG Block was accepted by the Government. Therefore, the finding of AO and Commissioner (Appeals) that the assessee has failed to prove relinquishment of any area in PG Block is contrary to the material on record. Further, a perusal of Article–16 of the PSC, as placed in the paper book, indicates that the assessee is to be allowed deduction of expenses in terms of section 42 of the Act. Therefore, the unsuccessful oil exploration expenses is allowable under section 42(1)(a) of the Act. - Decided in favour of assessee. Disallowance of set–off of exploration expenses against interest income - Held that:- Authorised Representative fairly submitted that the issue has to be decided against the assessee. In view of the aforesaid submissions made by the learned Authorised Representative, we dismiss the ground raised by the assessee. Short credit of TDS - Held that:- We direct the Assessing Officer to consider assessee’s claim in the context of facts and material available on record and grant proper credit of TDS. Ground raised is allowed for statistical purposes. Rejection of revised return of income filed by the assessee - assessee in the rev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essful exploration expenses - Held that:- There is no dispute that the assessee has filed the revised return of income within the prescribed time limit as per section 139(5) of the Act. Therefore, the contention of the learned Departmental Representative that the loss claimed in the revised return of income cannot be carried forward is not acceptable. As regards the allowability of expenditure claimed, the Revenue has failed to controvert the factual finding of the Commissioner (Appeals) that, though, the expenditure pertained to the preceding assessment year, however, in view of the Assessing Officer’s own decision, such expenditure is allowable in the assessment year wherein the block is surrendered. In view of the aforesaid, we do not find any infirmity in the order of the learned Commissioner (Appeals). Grounds are dismissed. Allowance of expenditure in respect of PY–3 Block - Held that:- On a reading of section 42(1)(b) of the Act, it becomes clear that after commencement of commercial production, expenditure incurred in respect of drilling or exploration activities or services or in respect of physical assets used in that connection, except, those assets on which depreciat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct Sharing Contract (PSC) r/w section 42(1)(a) of the Income Tax Act, 1961 (for short the Act ). The Assessing Officer while completing the assessment under section 143(3) of the Act disallowed the exploration expenses claimed by the assessee which was confirmed by the learned Commissioner (Appeals) on the reasoning that similar expenditure claimed by the assessee in the earlier assessment years were also disallowed. Being aggrieved of the order passed by the learned Commissioner (Appeals), assessee went in further appeal before the Tribunal. The Tribunal, while deciding assessee s appeal in ITA no.6890/Mum./2002, dated 16th March 2009, restored the issue to the Assessing Officer to decide afresh after properly examining the facts relating to the impugned assessment year. In the fresh assessment proceedings, in pursuance to the direction of the Tribunal, the Assessing Officer called upon the assessee to justify the claim of exploration expenses. It was submitted by the assessee that the expenditure claimed was on account of unsuccessful exploration of PG Block which was ultimately relinquished / surrendered in the relevant previous year. It was submitted that the expenditure was c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ute. Therefore, he submitted, the Department s claim that the assessee has not relinquished / surrendered a part of the PG Block is without any basis. The learned Authorised Representative submitted, as for clause 16 of the PSC r/w section 42(1)(a) of the Act, the assessee is entitled to claim deduction in respect of unsuccessful exploration expenses even prior to beginning of commercial production, if such expenditure is provided in the agreement. He submitted, in the impugned assessment year the assessee has also commenced commercial production, hence, it is eligible to claim deduction under section 41(1)(b) of the Act. Thus, he submitted, disallowance made by the Departmental Authorities is in violation of the provision of section 42(1)(a) of the Act. In support of his contention he relied upon a decision of the Tribunal, Mumbai Bench, in its own case for assessment year 2008 09, in ITA no.4042/Mum./2012, dated 19th February 2016. 7. The learned Departmental Representative relied upon the observations of the learned Commissioner (Appeals) and the Assessing Officer. 8. We have considered rival submissions and perused materials on record. In the original assessment order, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d short credit of TDS. 12. The learned Authorised Representative submitted, while the assessee has claimed credit for TDS amounting to ₹ 1,22,24,341, the Assessing Officer has given credit for ₹ 1,14,85,146. Thus, he submitted, the Assessing Officer may be directed to grant actual credit of TDS claimed by the assessee. 13. The learned Departmental Representative submitted, since the learned Commissioner (Appeals) has directed the Assessing Officer to give proper credit of TDS, no further direction is necessary. 14. Having considered rival submissions, we direct the Assessing Officer to consider assessee s claim in the context of facts and material available on record and grant proper credit of TDS. Ground raised is allowed for statistical purposes. 15. Ground no.6, relating to levy of interest under section 220(2). 16. This ground being consequential does not require adjudication at this stage. 17. In the result, assessees appeal is allowed for statistical purposes. ITA no.5534/Mum./2003 Assessee s Appeal A.Y. 1997 98 18. In ground no.1, the assessee has challenged the decision of the Departmental Authorities in rejecting the revised return ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rn of income. 23. The learned Departmental Representative, though, relied upon the observations of the Departmental Authorities, however, he submitted that the Assessing Officer may be directed to consider the revised return of income filed by the assessee on merit. 24. We have considered rival submissions and perused materials on record. Undisputedly, the assessee has filed the revised return of income within the time prescribed under section 139(5) of the Act. A reading of the said provision makes it clear that, in case, the assessee discovers any omission or any wrong statement in the original return of income he can file a revised return of income in the prescribed time limit. There is nothing in the said provision to suggest that the assessee cannot make a fresh claim in the revised return of income to be filed under section 139(5) of the Act. Only requirement of law is, it must be filed within the time limit prescribed under section 139(5) of the Act. As regards the allegation of the learned Commissioner (Appeals) that the assessee filed the revised return of income to reduce the taxable income by making jugglery in the accounts, we must observe, nothing prevents the As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g aggrieved of such disallowance assessee preferred appeal before the first appellate authority. However, the learned Commissioner (Appeals) upheld the disallowance made by the Assessing Officer on the reasoning that the assessee has utilised borrowed funds for earning dividend income. Hence, he upheld the disallowance made by the Assessing Officer. 31. The learned Authorised Representative submitted, before disallowing expenditure under section 14A of the Act, the Assessing Officer has not recorded any satisfaction that the claim of the assessee is incorrect. He submitted, the assessee is not in share trading business. Therefore, no expenditure is incurred by the assessee for such activity. 32. The learned Departmental Representative relied upon the observations of the learned Commissioner (Appeals) and the Assessing Officer. 33. We have considered rival submissions and perused materials on record. In the assessment order, the Assessing Officer has given a clear cut finding that the loan burden of the assessee is negligible, hence, it cannot be said that loan bearing funds are invested in tax free securities. Having held so, the Assessing Officer disallowed 15% of the exe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lock, the learned Commissioner (Appeals) allowed assessee s claim. 38. The learned Departmental Representative submitted, the assessee has not claimed the aforesaid expenditure in the original return of income. He submitted, such expenditure was claimed in the revised return of income. He submitted, allowance of such expenditure claimed in the revised return of income has resulted in increase of loss, which cannot be allowed to be carried forward as per the provisions of section 80 of the Act. 39. The learned Authorised Representative strongly relied upon the observations of the learned Commissioner (Appeals). 40. We have considered rival submissions and perused materials on record. Undisputedly, in the original return of income filed within the due date as prescribed under section 139(1) of the Act, the assessee has claimed loss. It is also a fact on record that while completing the assessment, the Assessing Officer has also determined loss and allowed carry forward of such loss. Therefore, there is no dispute that the assessee has fulfilled the conditions of section 80 of the Act. Therefore, any change in quantum of loss due to the direction of the appellate authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure claimed, the assessee preferred appeal before the first appellate authority. 43. After considering the submissions of the assessee in the context of the facts and material on record, the learned Commissioner (Appeals) observed that both PY 3 Block and Asjol Block have commenced production of oil during the relevant previous year. Therefore, he held that the expenditure which has been incurred on land scaping, pipe laying and producing property is allowable as revenue expenditure under section 42(1)(b) of the Act r/w PSC. Without prejudice to the aforesaid finding, the learned Commissioner (Appeals) observed that as per the depreciation schedule provided in the Income Tax Rules, 1962, 100% depreciation is allowable on plant used in field operation. Therefore, even if the expenditure is treated as capital in nature, still the assessee would be eligible to claim 100% deduction on account of the expenditure towards depreciation. 44. The learned Departmental Representative relied upon the observations of the Assessing Officer. Whereas, the learned Authorised Representative strongly relied upon the finding of the learned Commissioner (Appeals). 45. We have considered rival s ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
