TaxTMI 
TaxTMI 
2007 (3) TMI 180
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....exploration expenses in respect of the following: (a) Cambay offshore exploration permit Rs.69,94,968 (b) KrishnaGodavari Offshore exploration permit 12,29,632 India General Evaluation 5,80,626 88,05,226 (ii) Whether on the facts and in the circumstances of the case, the Tribunal is right in law in confirming the disallowance of pre-effective cost of Rs.2,72,93,866/-? (iii) Whether, on the facts and in the circumstances of the case, even assuming without conceding that the expenditure is not allowable as a deduction in computing the income for the previous year, the Tribunal ought not to have directed the grant of allowance of the aforesaid expenditure on the principle of amortization? 3. The substantial questions of law i....
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....as completed under Section 143(3), assessing the loss at Rs.40,21,92,229/-. It is stated that during the assessment year under consideration, the assessee was engaged in exploration and production activities in the contracted area identified as "Ravva Oil and Gas Field". The Assessing Officer disallowed claim of expenditure claimed to a sum of Rs.88,05,226/- relating to the exploration cost of three projects, namely, Cambay Offshore Exploration Permit, Krishna Godavari Offshore Exploration Permit and India General Evaluation. The Assessing Authority disallowed the said claim on the ground that a sum of Rs.81,86,965/- related to the earlier assessment year as per the Tax Audit Report filed. Further, the expenses....
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....he Tribunal confirmed the view that the audit report showed that the expenditure related to the prior period. Thus, the expenditure incurred in respect of Ravva Oil Fields was rejected as totally unsupported by any material to connect it as relevant to and related to the year under consideration. On the question of pre-effective cost, the assessee contended that the same were allowable as per the provisions of Section 35-D over a period of ten years, subject to certain limits and restrictions. The Tribunal found that the expenses to the extent of Rs.2,72,93,866/- were incurred by the holding company relating to the formalities of the company. The Tribunal noted that the Commissioner as well as the Assessing Officer f....
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.... in favour of the Revenue. 9. Learned senior counsel appearing for the assessee submitted that the Tribunal ought to have seen that the expenditure relating to the exploration ought to have been adjudged business-wise with each operation constituting a single integrated business. Consequently, the Tribunal erred in disallowing the claim relating to the exploration expenses that it related to the earlier years. Learned senior counsel also questioned the view of the Tribunal on the claim of the expenditure post-incorporation. He pointed out that the expenditure were incurred by the holding company only on account of the appellant company and that the claim had been made on the appellant company only during the relevant prev....
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....idering the fact that as regards India General Evaluation, the company was exploring the country regarding the possible area for further exploration of oil, the Assessing Authority disallowed the same. While considering the same, the Assessing Authority pointed out that the assessee admittedly stated that this expenditure related to earlier years and hence, considering the facts therein, the claim was rejected by the appellate authority also. Thus, the Commissioner of Income Tax (Appeals) concurred with the reasons given by the Assessing Officer. 12. In the appeal preferred, the Tribunal, the second appellate authority, referring to the audit report, confirmed the findings of the Assessing Officer as well as the Commissioner o....
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....post-incorporation was rejected. Thus, the Tribunal confirmed the findings of the authorities below. 15. Learned senior counsel appearing for the assessee/appellant could not get over this finding of fact by the Tribunal. In the circumstances, we do not find any ground to interfere with the order of the Tribunal. In the light of the view that we have taken confirming the findings, we reject all the grounds as pure questions of fact. Consequently, T.C.No.251 of 2007 stands rejected. 16. As regards T.C.No.252 of 2007, learned senior counsel appearing for the assessee submitted that the Tribunal had disposed of the appeal without considering the contention as regards the validity of the order passed under Section 143(....