THE COMMISSIONER OF INCOME TAX DEHRADUN and ORS vs. READING and BATES EXPLORATION CO.

ITA/536/2001HC UttarakhandUKHC01006297200303 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 Revenue) against an order of the Income Tax Appellate Tribunal. The respondent is M/s Reading & Bates Exploration Co., acting as the agent for Mr. H. Buttner. The assessment year(s) are not explicitly stated. The appeal concerns questions of law referred to the High Court under Section 260A of the Income Tax Act, 1961. The High Court had previously decided a similar matter on October 9, 2003, in Income Tax Appeal No. 57 of 2002, involving SEDCO Forex International Drilling Co. Ltd. The Revenue was represented by Mr. S.K. Posti, Advocate, while no one appeared for the respondent.

What did the High Court hold?

The High Court, in view of its prior decision in the case of Commissioner of Income Tax, Dehradun & another V/s SEDCO Forex International Drilling Co. Ltd., answered the referred questions. For the first question, concerning the taxability of "OFF Period Salary" under Section 9(1)(ii), the Court held in the negative, meaning it was taxable and in favour of the Department. For the second question, regarding free food, beverages, and boarding as a perquisite under Section 17(2)(iii), the Court held in the affirmative, meaning it was not a perquisite and in favour of the assessee. The judgment does not explicitly state the finding or reasoning for the third question regarding the deletion of interest under Section 234B, but the appeal was disposed of, implying a decision was reached. The operative direction was to dispose of the appeal, with no order as to costs.

What were the issues?

The High Court was asked to decide three questions of law: 1. Whether the Tribunal was correct in holding that "OFF Period Salary" was not taxable under Section 9(1)(ii) read with the Explanation as it stood at the relevant time? 2. Whether the Tribunal was correct in holding that free food, beverages, and boarding provided on the rig did not constitute a perquisite under Section 17(2)(iii)? 3. Whether the Tribunal was justified in deleting the interest levied on the assessee under Section 234B? Contentions: Assessee: The judgment does not record any specific contentions made by the assessee. However, the Tribunal's previous findings, which are under challenge, imply that the assessee argued that "OFF Period Salary" was not taxable and that free food, beverages, and boarding were not perquisites. The deletion of interest under Section 234B suggests the assessee argued against its levy. Revenue: The Revenue, through its appeal, contended that the Tribunal erred in its findings on all three questions. Specifically, the Revenue argued that "OFF Period Salary" was taxable, that free food, beverages, and boarding constituted a perquisite, and that the interest under Section 234B was rightly levied.

Which sections of the Income-tax Act were involved?

Section 260A,Section 9(1)(ii),Section 17(2)(iii),Section 234B

AI-generated summary — verify with the full judgment below

2003:UHC:3356

M/s Reading & Bates Exploration Co., As agent of Mr. H. Buttner, S.V. Road, Viley Parely, Bombay ………. Respondent Mr. S.K. Posti Advocate for appellants. None for the respondent.

IN THE HIGH COURT OF UTTARANCHAL AT NAINITAL

Income Tax Appeal No. 536 of 2001

1.

The Commissioner of Income Tax, Dehradun.

2.

The Income Tax Officer, Special Ward, Dehradun.

………. Appellants Versus

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 question 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 food, beverages and boarding on the

The order continues below.

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