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

ITA/40/2003HC UttarakhandUKHC01006244200303 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 Court stated that the matter was squarely covered by its previous decision dated October 16, 2003, in Income Tax Act Appeal No. 438 of 2001 (The Commissioner of Income Tax, Meerut & another V/s Atwood Oceanics International S.A. as agent of Mr. Gene Little). The reasoning for this decision, as per the prior judgment, would have established that the Continental Shelf and exclusive economic zone did not constitute part of India for income tax purposes before April 1, 1983, and consequently, income earned by employees for services rendered in such offshore areas outside territorial waters prior to that date was not taxable under the Income Tax Act, 1961, for the assessment year 1983-84. The appeal was disposed of accordingly.

What were the facts?

This is an appeal by the Commissioner of Income Tax and the Income Tax Officer against an order of the Income Tax Appellate Tribunal (ITAT). The assessee is Atwood Oceanics International, acting as the agent for Mr. Verdun Lewis. The assessment year in question is 1983-84. The appeal concerns two questions of law referred to the High Court under Section 260A of the Income Tax Act, 1961. The High Court notes that the matter is covered by its previous decision dated October 16, 2003, in a similar case involving Atwood Oceanics International S.A. as agent for Mr. Gene Little.

What were the issues?

The High Court was asked to decide two questions of law 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 was not 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 before April 1, 1983, in offshore areas outside India's Territorial Waters was not chargeable to tax under the Income Tax Act, 1961, for the assessment year 1983-84. The appellants (Revenue) argued that the Tribunal's findings on these issues were incorrect. The respondent (assessee) did not present any arguments, as indicated by 'None for the respondent'. The judgment does not record any specific arguments or reliance on authorities by either side for these questions, other than the reference to a prior decision of the High Court.

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. 40 of 2003

The Commissioner of Income Tax, Dehradun.

The Income Tax Officer, Special Ward, Dehradun. ………. Appellants Versus Atwood Oceanics International, As agent of Mr. Verdun Lewis. ……… 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 Act Appeal No. 438 of 2001; The Commissioner of Income Tax, Meerut & another V/s Atwood Oceanics International S.A. as agent of Mr. Gene Little. Two questions of law have been referred to us for our opinion under section 260A, which are as follows:- QUESTIONS:

(1) “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?”

(2) “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 Water of India was not chargeable to tax under Income Tax Act, 1961 for the assessment year 1983-84?”

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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