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2013 (9) TMI 758 - AT - Income TaxDeduction u/s 80IB for extracting of oil. – After considering the dictionary meaning of word " extraction' means 'removal' 'withdrawal' talking out', pulling out' 'origin' and mining, the Assessing Officer prima facie found that the literal meaning of these word is neither manufacture nor production and accordingly asked the assessee to justify its claim u/s 80IB. - Held that:- meaning for the definition given in Explanation to sec. 42, section. 293A as well as In various clauses of Production Sharing Contract ft does not require to undergo any process of any physical or composition change but after the process of separation of gas, water and other sedimentary elements become commercial commodity. Therefore, commercial production of mineral oil as per. sec. 8OIB(9) Involves the activity of extracting Oil from underneath of surface and transport it for sale and nothing else. Even otherwise, as per Production Sharing Contract, the assessee and other joint ventures have to explore, develop, extract and deliver the crude oil. This process includes distillation and separation of verified natural gas. Therefore, as per the agreement, the assessee Is bound to perform Its part and once the assessee is carried its operation In accordance with the terms and conditions of the said Agreement with the Govt. the benefit of the deduction u/s 801B is allowable to the assessee: - Decided in favor of assessee. Disallowance of loss due to cyclone - Since amount of receipt was confirmed to be taxed in this year, being insurance amount received from United Insurance Co., the loss is required to be allowed to the assessee. Since AO also did not examine the issue in its correct perspective, instead of remitting the matter to the ld. CIT(A), we consider it appropriate to remit the matter to the file of AO to examine the issue and allow loss. – Decided in favor of Assessee. Site restoration fund - section 33ABA - AO restricted the deduction claimed under section 33ABA of the Act at 20% of the profits and gains from business as computed by assessee - held that:- the assessee has furnished the necessary report of the auditor - the assessee has invested to the extent of Rs.1143 million. Therefore, it is eligible for deduction on the assessed income. Since this aspect was not noticed by the Ld. CIT(A) correctly and AO also after making additions to the income from business did not revise the claim, we direct the AO to examine the issue and whatever profits are determined, deduction under section 33ABA has to be allowed as per the provisions i.e. sum equal to 20% of the profits of such business or some equal to amount that was deposited as per provisions, which ever is less. - Decided in favor of assessee.
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