(1) Any agreement between the Central Government and any person for the association or participation of the Central Government or any person authorized by it in such business (which agreement has been laid on the table of each House of Parliament) with respect to any business consisting of the prospecting for, extraction from, or production of mineral oils shall be made in lieu of, or in addition to,

(a) to pay for infructuous or unsuccessful exploration costs in relation to any area that the assessee surrendered before the start of commercial production;

(b) to expenditures made by the assessee after the start of commercial production, whether before or after such commercial production, in relation to drilling or exploration activities or services or in relation to physical assets used in that connection, with the exception of assets on which allowance for depreciation is admissible under Section 32:

(c) to the depletion of mineral oil in the mining area for the assessment year pertinent to the year before commercial production starts, as well as for whatever succeeding year or years the agreement may specify;

The other provisions of this Act are deemed, for this purpose, to have been modified to the extent necessary to give effect to the terms of the agreement, and such allowances shall be computed and made in the manner specified in the agreement.

(2) Subject to the terms of the agreement mentioned in subsection (1), where the proceeds of the transfer (insofar as they consist of capital sums) are transferred, and where the assessee’s business, which consists of the prospecting for, extraction from, or production of, petroleum and natural gas, is transferred wholly or partially or any interest in such business,

a) If the proceeds of the transfer are less than the amount of the remaining unallowed expenditure, a deduction equal to the amount of the remaining unallowed expenditure, as reduced by the proceeds of the transfer, shall be permitted with respect to the prior year in which the business or interest, as applicable, was transferred;

(b) exceed the amount of the expenditure incurred remaining unallowed, so much of the excess as does not exceed the difference between the expenditure incurred in connection with the business or to obtain an interest therein and the amount of such expenditure remaining unallowed, shall be liable for income tax as profits and gains of the business in the prior year in which the business or interest therein, whether fully or in part, had been transferred:

(c). No deduction for such expenditure shall be allowed for the prior year in which the business, or an interest in such business, is transferred, or for any succeeding year or years, if the amount of the expenditure incurred remains unallowed is not less than the amount of the expenditure incurred.

Business Registration

NGO

COMPLIANCES

Change In Business

BIS & CDSCO

Government Registration

FSSAI

Environmental

Section 42 of Income Tax Act, 1961: Special Provision for deduction in the case of business for oil

Santanu Ghosh

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