TaxTMI 
TaxTMI 
1991 (6) TMI 17
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....ts and in the circumstances of the case, the Tribunal was right in holding that the income earned by the assessee from transporting the crude belonging to the Oil and Natural Gas Commission along with its own crude was attributable to the business of production of mineral oil within the meaning of item 3 of the list of articles and things specified in the Sixth Schedule to the Income-tax Act, 1961, read with section 80B(7) and section 80-1 of the said Act ? (5) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the assessee was entitled to relief under section 80-1 of the Income-tax Act, 1961, on the income earned by the assessee from transportation of crude oil belonging to the Oil and Natural Gas Commission ? (6) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the assessee was entitled to relief under section 80-1 of the Income-tax Act, 1961, on the income earned by the assessee from transportation of crude oil belonging to the Oil and Natural Gas Commission ? (7) Whether the Tribunal was justified in holding that oil wells constituted plant for the purpose of the allowan....
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....ses under section 37(3) of the Act. On appeal, the Commissioner of Income-tax (Appeals) held that the above sum was properly disallowable under rule 6D of the Income-tax Rules, 1962, and confirmed the disallowance made by the Income-tax Officer. The Income-tax Officer also disallowed Rs. 20,608 as entertainment expenses under section 37(2B) of the Act out of the total expenses of Rs. 61,825 claimed. The Commissioner of Income-tax (Appeals) confirmed the disallowance after mentioning that no details had been furnished in support of the contention that the said sum of Rs. 61,825 did not include any entertainment expenses. On further appeal by the assessee-company, the Tribunal held that the expenditure was incurred by the assessee in the field. Drilling was going on as per schedule and, therefore, the disallowance of the expenditure by the Income-tax Officer was not proper. The Tribunal, after taking note of clause 12 of the second supplemental agreement on which the assessee relied, deleted the disallowances under sections 37(3) and 37(2B) as sustained by the Commissioner of Income-tax (Appeals). The assessee had claimed deduction under section 80-I of the Act in respect of a sum of....
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....period of one month. This claim of the assessee-company was disallowed by the Income-tax Officer since there was no evidence to show that each such employee left the bungalow or the accommodation with all his family members and bag and baggage and that the bungalow was used for any purpose other than for the residence of the employees of the company. The assessee preferred an appeal to the Commissioner of Income-tax (Appeals ). It was contended on behalf of the assessee that perquisites of the executives in respect of the rent-free bungalows, the bungalow furniture should be calculated as if these were available to them only for a period of eleven months, and it was urged that the executives were on leave for one month during the relevant previous year and, therefore, were not enjoying the perquisites for one month. This plea of the assessee was not accepted by the Commissioner of Income-tax (Appeals ). In further appeal to the Tribunal, it was observed that the bungalows were partly used by the employees and partly used for the business of the assessee-company. It was held that 50 per cent. of the amount as referred to above should be taken into account for the purpose of computat....
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....nd 37(2B) of the Income-tax Act. It has been submitted that clause 12 of the second supplemental agreement indicated that the expenditure incurred by the assessee for the exploration or on prospecting and drilling for crude oil in India were to be treated as business expenditure. The assessee was entitled to deduction under sections 37(3) and 37(2B) of the Income-tax Act. It may be noted that the Tribunal has found that the assessee was doing exploration and prospecting and drilling for crude oil in India. The expenditure was incurred by the assessee in the field. The drilling was going on as per schedule and, therefore, the disallowance of the expenditure by the Income-tax Officer under sections 37(3) and 37(2B) of the Act was not proper in view of article 12(ii) of the second supplemental agreement which provides, inter alia, that all expenditure on exploration/prospecting/drilling which is incurred by Oil India Ltd. subsequent to the effective date of the grant of any mining lease is to be allowed as a deduction for tax purposes in the year in which the expenditure is incurred. The Tribunal has categorically found that the said expenditure was incurred by the assessee in the f....