Law:

Section:

I. Section 37(1) of the Income-tax Act, 1961 - Business expenditure - Allowability of - Assessment year 1996-97 - During relevant assessment year, assessee was engaged in exploration and production activities in contracted area identified as 'Ravva Oil Fields' - It claimed deduction of sum relating to exploration cost of three projects - Assessing Officer rejected claim on grounds that a major part of said expenses related to earlier assessment year and apart from that, same were not related to 'Ravva Oil Fields' but to two other projects for which production sharing contract was yet to be entered into - On appeal, Tribunal referring to tax audit report, confirmed findings of Assessing Officer - Whether findings of Tribunal being findings of fact, no question of law arose therefrom - Held, yes Section 37(1), read with section 35D, of the Income-tax Act, 1961 - Business expenditure - Allowability of - Assessment year 1996-97 - Whether expenses incurred by assessee's holding company relating to formation of assessee-company were deductible - Held, no II. Section 143 of the Income-tax Act, 1961 - Assessment - Prima facie adjustments - Assessment year 1998-99 - In his order under section 143(1)(a), Assessing Officer made adjustment in respect of site restoration cost provision-Commissioner (Appeals) allowed assessee's appeal, holding that no such adjustment was permissible under section 143(1)(a) - On revenue's appeal, Tribunal, however, without considering assessee's contention relating to validity of order passed under section 143(1)(a), decided issue on merits and held that assessee was not entitled to site restoration cost - Whether Tribunal's order deserved to be set aside and matter should be remanded to it to go into question of jurisdiction to make adjustments in an intimation under section 143(1)(a) - Held, yes FACTS-I The assessee was a foreign company engaged in the business of prospecting the production of mineral oil in India. It carried on the exploration and production activities under a multi-partite agreement entered into with other joint venture partners and the Government of India under production sharing contracts in various contract areas.…

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