Pride Foramer S.A vs Commissioner Of Income Tax

The Supreme Court examined whether a non-resident company engaged in offshore oil drilling activities in India could claim deductions for unabsorbed depreciation under Section 32(2) of the Income Tax Act for the assessment years 1996-97, 1997-98, and 1999-2000. The High Court had set aside the orders disallowing these deductions, affirming the CIT (Appeals) decisions. The Court analyzed the statutory provisions and the company's activities, ultimately upholding the allowance of unabsorbed depreciation deductions despite the absence of active drilling contracts during certain periods.