Section 293A — the law in short
What the courts have decided on section 293A, in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.
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Niko Resources Ltd v CIT
Advance RulingHelps departmentSuperseded by amendment
We are a foreign oil and gas exploration company entitled to the special deductions in s.42. Can we take those deductions before working out book profit for minimum alternate tax?
No. The Authority ruled that Niko Resources Ltd, a Canadian company exploring and developing oil and gas fields in India with Gujarat State Petrochemical Corporation Ltd under a contract with the Central Government, could not claim the special s.42 deductions in the calculation of book profit under s.115JA. Section 42 operates only when business income is computed under Chapter IV-D; s.115JA is a self-contained code that applies notwithstanding anything else in the Act, and neither s.42 nor s.293A cuts it down. The provisions of s.115JA applied to the applicant. The ruling binds only the applicant.
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John A. Sayre v CIT
Advance RulingHelps departmentSuperseded by amendment
I am a geologist running production at three oil and gas fields in India for a foreign oil company. Am I a technician in mining, or in constructional operations, for the section 10(5B) exemption?
No, on both routes. The Authority held that mining in the Explanation to s.10(5B) is not used in a broad sense that takes in prospecting for or extraction of mineral oil, because the Income-tax Act consistently treats mineral oil as something separate from minerals and makes its own special provision for it in ss.42, 44BB and 293A. It also rejected the alternative case that the applicant was a technician in constructional or manufacturing operations: he had a degree in geology and no shown special knowledge of construction, and he was employed to run oil and gas field production, not to build. It did accept the applicant's answer to the Commissioner's threshold objection - the second category of technician, one employed in any business carried on in India, need not be in government or public employment. The ruling binds only the applicant.
Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.