Law:

Section:

Section 24-AA of the Companies (Profits) Surtax Act, 1964 - Business of prospecting for, extraction, etc., of mineral oils - Power of Central Government to make exemption, etc., in relation to - Whether Exemption Notification No. GSR 307 (E), dated 31-3-1983 confines or restricts scope of exemption to only one category of foreign companies which has been specifically enumerated in sub section 2(a) of section 24-AA, i.e., foreign companies with whom Central Government had executed agreements for direct association or participation by Central Government or persons authorized by it (ONGC) in prospecting or extraction or production of mineral oils and second category of foreign companies that may be providing services as enumerated in sub-section 2(b) of section 24-AA, is specifically omitted in exemption notification - Held, yes - Whether when out of two limbs where power of exemption was intended to operate, repository of power, i.e., Central Government, had consciously chosen to grant exemption in one particular field, i.e., foreign companies covered by sub-section 2(a) of section 24-AA, scope of grant can be enhanced or expanded by a judicial pronouncement - Held, no [Para 13] [In favour of revenue] Circulars & Notifications : Notification No. GSR 307E, dated 31-3-1983 FACTS â–  The ONGC had executed agreements with different foreign companies for services or facilities or for supply of ship, aircraft, machinery and plant, as may be, all of which were to be used in connection with the prospecting or extraction or production of mineral oils. â–  The primary authority held that the agreements executed by the ONGC with the foreign companies being for services to be rendered and such agreements not being for association or participation in the prospecting or extraction or production of mineral oils, would not be covered by the exemption notification bearing No. GSR 307 (E) which by its very language granted exemption only to foreign companies with whom there were agreements for participation by the Central Government or the person authorized in the business of prospecting, extraction or production of mineral oils. The agreements in question, according…

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