Section 42 Special provision for deductions in the case of business for prospecting, etc., for mineral oil

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The Tax Publishers 42. Special provision for deductions in the case of business for prospecting, etc., for mineral oil. [1][(1) For the purpose of computing the profits or gains of any business consisting of the prospecting for or extraction or production of mineral oils in relation to which the Central Government has entered into an agreement with any person for the association or participation [2][of the Central Government or any person authorised by it in such business] (which agreement has been laid on the Table of each House of Parliament), there shall be made in lieu of, or in addition to, the allowances admissible under this Act, such allowances as are specified in the agreement in relation (a) to expenditure by way of infructuous or abortive exploration expenses in respect of any area surrendered prior to the beginning of commercial production by the assessee; (b) after the beginning of commercial production, to expenditure incurred by the assessee, whether before or after such commercial production, in respect of drilling or exploration activities or services or in respect of physical assets used in that connection, except assets on which allowance for depreciation is admissible under Section 32 : [3][* * ] [4][Provided* that in relation to any agreement entered into after 31st day of March, 1981, this clause shall have effect subject to the modification that the words and figures except assets on which allowance for depreciation is admissible under Section 32 had been omitted; and] SUBSCRIBE FOR FULL CONTENT

The Tax Publishers

42. Special provision for deductions in the case of business for prospecting, etc., for mineral oil.

[1][(1) For the purpose of computing the profits or gains of any business consisting of the prospecting for or extraction or production of mineral oils in relation to which the Central Government has entered into an agreement with any person for the association or participation [2][of the Central Government or any person authorised by it in such business] (which agreement has been laid on the Table of each House of Parliament), there shall be made in lieu of, or in addition to, the allowances admissible under this Act, such allowances as are specified in the agreement in relation

(a) to expenditure by way of infructuous or abortive exploration expenses in respect of any area surrendered prior to the beginning of commercial production by the assessee;

(b) after the beginning of commercial production, to expenditure incurred by the assessee, whether before or after such commercial production, in respect of drilling or exploration activities or services or in respect of physical assets used in that connection, except assets on which allowance for depreciation is admissible under Section 32 : [3][* * *]

[4][Provided that in relation to any agreement entered into after 31st day of March, 1981, this clause shall have effect subject to the modification that the words and figures except assets on which allowance for depreciation is admissible under Section 32 had been omitted; and]