JOSHI TECHNOLOGIES INTERNATIONAL INC Vs. UNION OF INDIA

JUDGEMENT

(1.) Joshi Technologies International Inc., a company incorporated in the United States of America seeks mandamus that they are entitled to benefit under Section 42 of the Income Tax Act, 1961 (Act, for short) in respect of the two Production Sharing Contracts (PSCs, in short) both dated 20 th February, 1995 for Oil Fields in Dholka and Wavell, Gujarat.

(2.) The factual background in brief is that the petitioner along with Larsen & Toubro Ltd., (who subsequently assigned and transferred their rights in favour of the petitioner), were successful bidders in the Notice Inviting Tender, dated 31 st December, 1992 ( 1992 NIT ). The petroleum profit was/is to be shared as per the terms of the PSC between the Government of India, Ministry of Petroleum and Natural Gas and the petitioner. The two PSCs have duration of 18 years from their effective date and have extension provisions.

(3.) The petitioner in the returns for the Assessment Years 2001-02, 2003-04 and 2004-05, claimed and was allowed deductions under Section 42 of the Act. However, in respect of the assessment year 2005- 06, the Assessing Officer denied benefit under Section 42 vide order dated 31 st December, 2007. Several other additions were made. This had resulted in an additional demand of Rs.1,24,45,509/-. The petitioner has filed an appeal against the assessment order before the appellate authority. It appears that the appeal is pending.