TaxTMI 
TaxTMI 
2009 (5) TMI 5
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....red in coming to the conclusion that the commercial production, in the case of the assessee, had commenced in the assessment year 1996-1997 for the purposes of deduction under Section 80-IB(9) of the Act . The assessee's case before us was that the commercial production had commenced in the assessment year 1999-2000. In order to dispose of these appeals the following facts require to be noticed. 2.1 The Government of India had issued a Notice Inviting Tender (in short "NIT") for developing certain oil fields which included the Kharsang oil field in the state of Arunachal Pradesh. The assessee at the relevant time was a member of a consortium which responded to the NIT. The consortium's bid was successful and consequently it entered into a Production Sharing Contract (in short "PSC") with the Government of India dated 16.06.1995. Under the PSC, the Government of India handed over 36 oil wells which had already been drilled alongwith 10 new oil wells. It is important to notice at this stage that the assessee was incorporated only on 13.04.1994. 2.2 The Government of Arunachal Pradesh executed a lease in favour of the consortium for carrying out the mining operations in respect of ....
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.... of the Act would be assessment year 1999-2000 which according to her was the year in which the assessee had commenced commercial production. The same situation obtained for assessment year 2001-02. Following her earlier order CIT(A)-1 reiterated that the initial assessment year for the purposes of Section 80-IB(9) of the Act would be assessment year 1999-2000. 5. The Revenue being aggrieved by the said orders of CIT(A)-1 preferred an appeal to the Tribunal in respect of assessment year 2000-01 and 2001-02 being ITA nos. 3240/Del/05 and 3551/Del/2005 respectively. 5.1 The issue as to what was the initial assessment year for the purposes of Section 80-IB(9) of the Act also came up for consideration before the Assessing Officer in assessment years 2003-04 and 2004-05. The Assessing Officer in respect of the said assessment years similarly concluded that since initial assessment year for the purposes of Section 80-IB(9) of the Act was assessment year 1996-97 the deduction under Section 80-IB of the Act being available only for a period of seven years from the date of initial assessment year the relevant period expired in the previous year relevant to assessment year 2002-03 and ....
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.... after the commencement of the work-over operations was 44,630 metric tons. (iv) It was observed that the exploration carried out by the Oil India Limited led to discovery of petroleum in commercial quantities in the contract area. (v) The Government desired that petroleum resources in the contract area be exploited expeditiously which is why the Government had invited bids from interested persons for development of resources in the contract area. It was pursuant to this that the consortium was granted rights to exploit petroleum resources in the contract area. Importantly the finding is that oil in commercial quantity was available and some oil was already flowing. The consortium started production of crude oil soon after the agreement was made. In order to ensure that production was carried out in an efficient manner work-over operations were carried out to improve the quality of the wells. 9. In the context of the aforesaid findings we have heard the arguments advanced by both the counsels, Mr S. Ganesh, learned Senior Advocate instructed by Mr H. Raghavender as well as Ms Prem Lata Bansal, learned counsel for the Revenue. It was submitted by the learned counsel for the....
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.... entitled to a deduction for seven consecutive assessment years commencing from the year in which the commercial production took place. There is no denying that the assessee was required to carry on make-over operations to enhance the production of the oil wells. The learned counsel thus submits that the Revenue could not have taken into account the make-over period. It is only after the make-over operations were completed that the commercial production in terms of Section 80-IB(9) read with Section 80-IB(14)(c)(iii) of the Act could said to have commenced. 10. As against this the learned counsel for the Revenue Ms Prem Lata Bansal submitted that the issue raised by the assessee in the appeal is a pure question of fact. The authorities below have returned a finding of fact against the assessee and hence this court need not look any further. The learned counsel for the Revenue in order to drive home the point relied upon extracts from the balance sheet of the assessee to demonstrate that the assessee itself had taken the stand that it was entitled to a claim of deduction under Section 80-1A (the provision as its stood prior to it being substituted by 80-IB), however, chose not to....
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....sessee had contended that the initial year of assessment for the purposes of Section 80-IB ought to have been assessment year 2000-01. It was, therefore, the submission of the learned counsel for the Revenue that the shifting stands of the assessee are a clear pointer to the fact that what the assessee had indicated in its financial statement for the year ending 31.03.1996 was correct and that only to get out of the said situation the assessee as the years progressed chose to shift the initial assessment year with a view to claim a deductions for a longer period, which is not available to it. 11. Having heard the learned counsel for the parties, it is relevant to note that the following facts which have emerged and which cannot be disputed are as follows: 11.1 The financial statement of the assessee for the assessment years 1996-97, 1998-99 and 1999-2000 bear the following noting: "GEO ENPRO PETROLEUM LIMITED Assessment Year 1996-97 Accounting Year 1995-96 Computation of Business Income Loss as per Profit & Loss Account xxxx xxxx Xxxx xxxx xxxx xxxx xxxx NOTES: (i) The Company alongwith other Consortium Members had ent....