TaxTMI 
TaxTMI 
2026 (6) TMI 507
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....x Appellate Tribunal "A" Bench, Chennai, dated 04.06.2010 in I.T.A.No.864/Mds/2004. 2. Brief facts leading to the appeals by the revenue: The company, "Cairn Energy India Pty. Limited (CEIL)" is a non-resident Company incorporated in New South Wales, Australia and engaged in prospecting and production of mineral oil and in some cases, natural gas also in India through its Project Office located at Chennai. The said Company is wholly owned subsidiary of Cairn Energy Asia Limited (CEAL), which is a company incorporated and registered in Australia. 3. The Assessing Officer held that, under the profit-sharing contract, there is no express provision to allow the provisions for site restoration costs as admissible deduction under Section 42 of the Income Tax Act, 1961 (for short, 'the Act'), and the expenses incurred before or after the commercial production, in respect of drilling or exploration activities alone, are eligible for deduction. After the insertion of Section 33-ABA of the Act, with effect from 01.04.1999, the special benefit is not in addition to the normal business deduction available under Section 37(1) of the Act. 4. Though the assessee is under obligation to....
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....penditure though may not be strictly allowable under section 37(1) of the Act yet be a liability which is ascertained liability and, does not warrant any adjustment under section 115-JA of the Act. 13....... 14.The undisputed facts as emerging from the material on record are, the assessee company in each of the assessment years was engaged in carrying out petroleum operations in Ravva oil filed under the PSC with joint venture partners namely M/s.Videocon Petroleum Ltd., Ravva oil (Singapore) Pvt. Ltd., ONGC and Govt. of India. Article 1.65 of PSC defines the expression "petroleum operations" as under: "Petroleum operations" means, as the context may require, exploration operations, development operations or production operations or any combination of two or more of such operations, including construction, operation and, maintenance of all necessary facilities, plugging and, abandonment of wells, environmental protection, transportation, storage, sale or disposition of petroleum to the delivery point, site restoration and all other incidental operations or activities, as may be necessary." 15. From the aforesaid definition, it is seen that, petro....
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.... scope for the Assessing Officer while computing the income under section 115-J to find out as to whether the said profit and loss account was in fact prepared and properly maintained in accordance with the Companies Act or not. In fact, we may quote the following paragraph in the said apex court judgment: "Therefore, we are of the opinion, the Assessing Officer while computing the income under section 115-J has only the power of examining whether the books of account are certified by the authorities under the Companies Act as having been properly maintained in accordance with the Companies Act. The Assessing Officer thereafter has the limited power of making increases and reductions as provided for in the Explanation to the said section. To put it differently, the Assessing Officer does not have the jurisdiction to go behind the net profit shown in the profit and loss account except to the extent provided in the Explanation to section 115-J". From a perusal of the above, it can be inferred that once the profit and loss account prepared by the assessee is certified by the authorities under the Companies Act, as having been properly maintained in accordance with th....
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.... same will be considered while computing income under section 115-JA of the Act,' the Revenue has filed the above appeals. The three Tax Case Appeals for the respective assessment years, were admitted to answer the following common substantial questions of law: (i) Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in holding that the reopening of the assessment under Section 147 was bad in law even though the Return had been processed only under Section 143(1) and no assessment had been made under Section 143(3), without taking note of the Supreme Court's decision in Assistant Commissioner of Income Tax Vs. Rajesh Jhaveri Stock Brokers P. Ltd. (2007) 291 ITR 0500)? (ii) Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in holding that the provision for Site Restoration Expenses could not be added back by way of adjustment treating it as an unascertained liability in the computation of book profits under Section 115-JB / 115-JAA, even though the dis-allowance of the claim was under Section 37(1) has been upheld ? (iii) Whether on the facts and in t....
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....deduction under Section 42 of the Act in respect of anticipated expenses for site restoration. The assessment orders for the year 1999-2000, 2000-2001 and 2001-2002, challenged by the assessee-Company, were partly allowed by the appellate authority. As against the orders of the Appellate Authority, the Revenue preferred appeals before the Income Tax Appellate Tribunal. Those appeals were partly allowed by the Tribunal, vide common order, dated 04.06.2010. 11. Being aggrieved, the assessee filed appeals in T.C.A.Nos.1299, 1300 and 1301 of 2010. After a detailed discussion, this Court allowed the above appeals of the assessee-Company, answering the substantial questions of law in negative, as against the Revenue. The present appeals by the Revenue are in respect of the dismissal portion of the appeal filed by the Revenue. 12. The answer to the common substantial questions of law in these appeals subsumes within the questions of law framed and answered in the assessee's appeals T.C.A.Nos.1299 to 1301 of 2010, filed against the same common order of ITAT. In respect of the substantial questions of law are concerned, we have held that the finding of the Tribunal that the expenditur....