THE COMMISSIONER OF INCOME TAX and ORS vs. ATWOOD OCEANICS INTL.

ITA/21/2003HC UttarakhandUKHC01006222200303 November 2003Author: OTHER2 pages

AI SummaryAllowed

What did the High Court hold?

The High Court answered both questions in the affirmative, in favour of the assessee and against the department. The reasoning was based on the Court's prior decision in Income Tax Appeal No. 438 of 2001, Commissioner of Income Tax, Meerut & another Vs Atwood Oceanics International S.A. as agent of Mr. Gene Little. The principle established in that judgment, which the current case followed, was that the Continental Shelf and offshore areas outside the Territorial Waters of India were not considered part of India for income tax purposes prior to April 1, 1983. Consequently, salary income earned by employees for services rendered in such areas before that date was not chargeable to tax. The appeal was disposed of accordingly, with no order as to costs.

What were the facts?

The Commissioner of Income Tax, Dehradun and the Income Tax Officer, Special Ward, Dehradun (appellants) appealed against an order of the Income Tax Appellate Tribunal. The respondent is Atwood Oceanics International, acting as agent for Mr. J. Mecoy. The appeal concerns assessment year 1983-84, corresponding to the accounting year ending March 31, 1983. The High Court noted that the matter was covered by its previous decision in a similar case involving Atwood Oceanics International S.A. and Mr. Gene Little. No arguments were presented by the respondent.

What were the issues?

The High Court was asked to decide two questions of law referred under section 260A of the Income Tax Act, 1961: 1. Whether the Tribunal was correct in holding that the Continental Shelf to the exclusive economic zone did not constitute part of India prior to April 1, 1983, for the purposes of the Income Tax Act, 1961. 2. Whether the Tribunal was correct in holding that salary income earned by employees for services rendered on a rig offshore, outside the Territorial Waters of India, before April 1, 1983, was not taxable under the Income Tax Act, 1961, for assessment year 1983-84. The appellants (Revenue) presented the questions for determination. The judgment records no specific arguments made by the respondent (assessee) or the revenue beyond the framing of the questions.

Which sections of the Income-tax Act were involved?

Section 260A

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF UTTARANCHAL AT NAINITAL

Income Tax Appeal No. 21 of 2003

The Commissioner of Income Tax, Dehradun

The Income Tax Officer, Special Ward, Dehradun. ............. Appellants

Versus

Atwood Oceanics International, As agent of Mr. J. Mecoy. ........... 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 16th October 2003 in Income Tax Appeal No. 438 of 2001; The Commissioner of Income Tax, Meerut & another Vs Atwood Oceanics International S.A. as agent of Mr. Gene Little.

Two questions of law have been referred to us for out opinion under section 260A, which are as follows:- QUESTIONS:

"Whether, the Tribunal was right in holding that the Continental Shelf to the exclusive economic zone did not form part of India prior to 1.4.1983 for the purposes of Income Tax Act, 1961?"

"Whether, the tribunal was right in holding that salary income earned by the employees for services rendered on the rig before 1.4.1983 in the off shore areas outside the Territorial Waters of India was not chargeable to tax under Income Tax Act, 1961 for the assessment year

1983-84 corresponding to accounting year ending 31st March 1983?" ANSWER: For reasons given in our above judgment, we answer both the questions in the affirmative that is in favour of the assessee and against the department. Appeal disposed of. No order as to costs.

(M.M. Ghildiyal, J.) (S.H. Kapadia, C.J.) Gur

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