Condition precedent for claiming deduction under section 42 of IT Act : ITAT Ahemdabad

RELEVANT PARAGRAPH 29. On a close reading of this section, we find that the deduction under this section is allowed for computing the profits and gains of the business of prospecting for or extracting or production of mineral oil, in relation to which, the Central Government has entered into an agreement. Only such deductions are allowed under section 42(1) as are specified in the agreement and that also when they fall in any of the sub clause (a), (b) or (c) of section 42(1). Sub clause (a) applies to an activity prior to beginning of commercial production and sub clause (b) applies to the si...