THE COMMISSIONER OF INCOME TAX and ORS vs. REDING and BATES EXPLORATION

ITA/47/2003HC UttarakhandUKHC01006250200303 November 2003Author: OTHER2 pages
AI SummaryPartly Allowed

What were the facts?

This case involves an appeal by the Commissioner of Income Tax, Dehradun, and the Income Tax Officer, Special Ward, Dehradun (the appellants/Revenue) against M/s Reading & Bates Exploration Co., acting as agent for Mr. D.H. Thompson (the respondent/assessee). The appeal concerns questions of law referred under Section 260A of the Income Tax Act, 1961. The High Court of Uttaranchal at Nainital was hearing the matter. The judgment notes that the matter is squarely covered by a previous decision of the same court dated October 9, 2003, in a similar appeal involving SEDCO Forex International Drilling Co. Ltd. The respondent was not represented.

What did the High Court hold?

The High Court answered the first question in the negative, in favour of the Department and against the assessee. This means the court held that 'OFF Period Salary' was indeed taxable under Section 9(1)(ii) read with the Explanation as it stood at the relevant time. The reasoning would align with the court's previous judgment in the SEDCO Forex case, likely finding that the salary accrued or arose in India or was paid by a resident, making it taxable. The second question was answered in the affirmative, in favour of the assessee and against the Department. This implies the court upheld the Tribunal's finding that the free boarding facility provided on the rig was not a perquisite taxable under Section 17(2)(iii). The reasoning would likely be that the facility was essential for the performance of duties in a remote location and not a personal benefit in the conventional sense. The appeal was disposed of accordingly.

What were the issues?

The High Court was asked to decide two questions of law: 1. Whether the Income Tax Appellate Tribunal was correct in holding that 'OFF Period Salary' was not taxable under Section 9(1)(ii) read with the Explanation as it existed at the relevant time. 2. Whether the Tribunal was correct in holding that a free boarding facility provided by the employer on the rig did not constitute a perquisite under Section 17(2)(iii). The Revenue contended that 'OFF Period Salary' was taxable and that free boarding was a taxable perquisite. The judgment does not explicitly record the assessee's arguments but implies they supported the Tribunal's findings. The court relied on its prior decision in the SEDCO Forex International Drilling Co. Ltd. case.

Which sections of the Income-tax Act were involved?

Section 260A,Section 9(1)(ii),Section 17(2)(iii)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF UTTARANCHAL AT NAINITAL

Income Tax Appeal No. 47 of 2003

1.

The Commissioner of Income Tax, Dehradun.

2.

The Income Tax Officer, Special Ward,

Dehradun.

………. Appellants

Versus

M/s Reading & Bates Exploration Co., As agent of Mr. D.H. Thompson, New Delhi.

……… Respondent

Mr. S.K. Posti, Advocate for appellants. None for the respondent.

Coram: Hon’ble S.H. Kapadia, C.J. Hon’ble M.M. Ghildiyal, J.

Date: 03.11.2003

PC:-

Affidavit proving service taken on record. The matter is squarely covered by our decision dated 9th October 2003 in Income Tax Act Appeal No. 57 of 2002; The Commissioner of Income Tax, Dehradun & another V/s SEDCO Forex International Drilling Co. Ltd.

The questions referred to us for opinion under section 260A of the Income Tax Act are as follows:- QUESTIONS: (1) “Whether, the Tribunal was right in holding that “OFF Period Salary” was not taxable u/s 9(1)(ii) read with the Explanation as it stood at the relevant time?”

(2) “Whether, the Tribunal was right in holding that free boarding facility provided by the employer on the rig is not a perquisite

The order continues below.

Read the full judgment

A free account opens 10 full judgments a month. Re-reading one you have already opened does not count again.

Create a free accountSign in

See plans and prices

The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.

More judgments on Section 9(1)(ii)

All 117 judgments and leading authorities on Section 9(1)(ii) →

Recent GST High Court judgments

Search GST case law →