Criteria for qualification of deduction u/s 42 of the Income Tax Act

Last updated: 10 August 2021
Quick Summary
This Income Tax Appellate Tribunal ruling clarifies the criteria for claiming deductions on expenses related to oil and gas exploration and drilling under Section 42 of the Income Tax Act. The Tribunal found that drilling is an integral part of prospecting and exploration. Crucially, the judgement states that expenses incurred for exploration and development are allowable even if they occur after the commencement of commercial production, provided they are in line with the relevant agreements.

Court :
ITAT Mumbai

Brief :
The assessee is in second round of appeal before us since the matter was earlier remanded back by co-ordinate bench of Tribunal (ITA No.61/Mum/2011 order dated 07/02/2014)

Citation :
I.T.A. No.2545/Mum/2019

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Poojitha Raam Vinay
Published in Income Tax
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