COMMISSIONER OF INCOME TAX Vs. COCHIN REFINERIES LIMITED

JUDGEMENT

(1.) THE Department desires the following questions to be directed to be raised by the Tribunal and referred to us for determination :

(2.) THE assessee-company carried on the business of refining crude oil. THE relevant assessment years are 1981-82 and 1982-83. For the assessment year 1981-82, the assessee claimed ocean loss of Rs. 4,46,92,480 while for the assessment year 1982-83, the assessee claimed ocean loss of Rs. 1,04,24,414. Prior to the assessment years in question, in respect of crude oil which was transported for the refinery by the Shipping Corporation of India, ocean loss up to 0.5 per cent. was borne by the concerned refinery and any loss over and above 0.5 per cent. was to be recovered from the Shipping Corporation of India. On January 31, 1981, the Government of India issued instructions to various refineries, including the assessee herein, in respect of ocean loss on imported crude. By this letter, the refineries were directed that their cumulative ocean loss for the financial year up to 0.5 per cent. would be borne by the Shipping Corporation of India while the cumulative ocean loss for the year in excess of 0.5 per cent. would be borne by the refineries concerned. THE letter gives various detailed instructions about the manner in which this ocean loss is to be adjusted and/or recovered. Under Clause (iv) in respect of ocean loss deductions made by the oil companies from freight payments to the Shipping Corporation of India and pool account adjustments made by oil companies for the period from January 1, 1978, to December 31, 1980, each individual voyage will be analysed by OCC/Refineries/SCI jointly for determining the ocean loss recoverable from the Shipping Corporation of India and adjustable by oil companies in pool accounts.

(3.) THE other two questions are based on findings of fact. In these circumstances, the original petitions are dismissed.