High Court of Uttarakhand · Judgments and reasoned final orders
Director of Income Tax (International Taxation) & Others v. Dolphin Drilling PTE Limited
Special Appeal No. 285 of 2015 (arising out of WPMS No. 200 of 2011) ·
Reassessment notice under section 147/148 where depreciation of Rs. 131.71 crore was allowed on drilling ship 'Belford Dolphin' later found to be owned by Fred Olsen Drilling A.S.: Single Judge erred in quashing section 148 notice at threshold; Special Appeal of Revenue allowed.
1. FACTS OF THE CASE
The respondent claimed depreciation of Rs. 305.73 crore (and was allowed Rs. 131,71,89,885) representing itself as the owner of the deep-water drilling ship 'Bellford Dolphin'. During assessment proceedings for AY 2005-06 in the case of a related entity (M/s. Dolphin Drilling Ltd.), the Department received evidence from ONGC showing that 'Bellford Dolphin' was owned by Fred Olsen Drilling A.S., which had executed an MOU to make the vessel available for ONGC's tender. The ADIT (International Taxation) issued a notice under section 148 and rejected the respondent's objections on 20.12.2010. By judgment dated 03.04.2015 in WPMS No. 200 of 2011, the Single Judge quashed the section 148 notice on the ground that depreciation had been accepted by the CIT(A) and ITAT in AYs 2004-05 and 2005-06.
2. DISCUSSION BY THE COURT
Relying on Raymond Woollen Mills Ltd. v. ITO ((1999) 236 ITR 34 (SC)) and Phool Chand Bajrang Lal v. ITO ((1993) 203 ITR 456 (SC)), the Division Bench held that at the stage of a section 148 notice the Court only examines whether there is prima facie material to form a belief of escapement. In the earlier appeals before the CIT(A) and ITAT, only the quantum of depreciation had been in issue, whereas the newly discovered factual question of whether the respondent was actually the owner of the drilling ship 'Bellford Dolphin' had never been considered and had to be adjudicated by the statutory authorities under the Act.
3. JUDICIAL DECISION
Allowed Special Appeal No. 285 of 2015 and set aside the Single Judge's judgment dated 03.04.2015 in Writ Petition (M/S) No. 200 of 2011.
4. OUTCOME
Revenue - Special Appeal No. 285 of 2015 allowed; Single Judge judgment dated 03.04.2015 in WPMS No. 200 of 2011 quashing the section 148 notice set aside.
5. AKHB REVIEW POINT
AKHB analysis: under the third proviso (merger clause) to pre-2021 section 147, merger with an appellate order on the rate/quantum of depreciation under section 32 does not bar reopening when subsequent tangible material from a third party (such as ONGC contract records) reveals that the assessee was not the owner of the asset at all.
Source: AKHB analysis based on Paragraphs 12-19; PDF pp. 5-9
Source and verification
9-page official High Court of Uttarakhand judgment PDF (20250812_UKHC010013602015.pdf).
Original PDF: 9 pages · SHA-256: a7fd8c3c99647614d3ee4ab211df125ebca7bd764fe8dd5b00b6cb53716c23a0
Supplied source-reviewed note retained; original bytes and identity validation checked in this release. Substantive re-review is not claimed for this record.
Applies sections 32, 147 and 148 of the Income-tax Act, 1961. Income-tax Act, 2025 equivalence is not verified.
Full primary judgment PDF read page-by-page and verified against the AKHB Google Drive repository. Comprehensive subsequent judicial treatment has not been independently verified.
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