READING and BATES DRILING CO. vs. THE COMMISSIONER OF INCOME TAX

ITA/115/2004HC UttarakhandUKHC01004894200416 July 2005Author: HON'BLE MR. JUSTICE P. C. VERMA2 pages

AI SummaryDismissed

What did the High Court hold?

The High Court held that the substantial question of law framed in the present appeal had already been decided by a Division Bench of the same High Court in the case of Commissioner of Income-tax and another Vs. Sedco Forex International Drilling Co. Ltd. reported in (2003) 264 ITR 320. That judgment answered the identical question in favour of the Department and against the assessee. Therefore, following the precedent, the High Court answered the question of law in the affirmative, meaning in favour of the Department and against the assessee. The appeal was dismissed accordingly, with no order as to costs. The reasoning was based on the binding precedent of the Division Bench judgment.

What were the facts?

The appellant, Reading and Bates Drilling Co., acting as agent for Mr. Doug Strickland, filed an appeal under Section 260A of the Income Tax Act, 1961. The appeal challenged the order dated 26.03.2004 passed by the Income Tax Appellate Tribunal, New Delhi, in I.T.A. No. 1521/Del/95. The assessment year in question is 1994-95. The dispute revolves around the taxability of 'off-period' salary paid to the petitioner in India. The High Court was considering the appeal against the Tribunal's decision.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Tribunal erred in law in holding that the ‘off-period’ salary paid to the petitioner was liable to tax in India? (Question of law turning on the interpretation of taxability provisions). Assessee's Contention: The judgment does not record any specific arguments made by the assessee's counsel before the High Court. The appeal was decided based on a previous judgment. Revenue's Contention: The judgment does not record any specific arguments made by the revenue's counsel before the High Court. The revenue's position was upheld based on a previous judgment.

Which sections of the Income-tax Act were involved?

Section 260A

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances

Assessment Year 1994-95 IN THE HIGH COURT OF UTTARANCHAL AT NAINITAL Income Tax Appeal No. 115 of 2004 Reading and Bates Drilling Co. As agent of Mr. Doug Strickland …………… Appellant Versus The commissioner of Income-tax Dehradun ………….. Respondent Ms. Krishi Shukla, learned counsel for the appellant. Mr. S.K. Posti, learned counsel for the respondent. Coram Hon’ble P.C. Verma, J. Hon’ble P.C. Pant, J. This is an appeal preferred under Section 260A of the Income Tax Act, 1961, filed by the appellant against the judgment and order dated 26.03.2004 passed by the Income Tax Appellate Tribunal, New Delhi in I.T.A. No. 1521/Del/95. 2) The substantial question of law framed is as follows: “Whether on the facts and in the circumstances of the case, the Tribunal erred in law in holding that the ‘off-period” salary paid to the petitioner was liable to tax in India?” 3) This questions of law has already been decided by a Division Bench of this High Court in Income Tax Appeal No. 57 of 2002, in the case of Commissioner of Income-tax and another Vs. Sedco Forex International Drilling Co. Ltd. reported in (2003) 264 ITR 320 and was answered in favour of the Department and against the assessee. The question framed above is identical one as decided vide aforementioned

judgment.

4) Therefore, the above question of law is answered in the affirmative i.e. in favour of the Department and against the assessee for the reasons recorded in the judgment (supra).

The Appeal is dismissed accordingly. No order as to costs.

(P.C. Pant, J.) (P.C. Verma, J.)

Dt. 16th July, 2005. H.Negi

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