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

ITA/48/2003HC UttarakhandUKHC01006251200303 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 assessee is M/s Reading & Bates Exploration Co., acting as agent for Mr. P. Conyers. The assessment year(s) are not explicitly stated. The appeal challenges the Tribunal's findings regarding the taxability of 'OFF Period Salary' and free boarding facilities. The High Court of Uttaranchal at Nainital was seized of the matter, with the appeal being disposed of on November 3, 2003. The Revenue was represented by counsel, while no one appeared for the respondent assessee.

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 for this decision is not detailed but is stated to be covered by the Court's prior judgment in the SEDCO Forex International Drilling Co. Ltd. case. The second question was answered in the affirmative, in favour of the assessee and against the Department. This implies the Court held that the free boarding facility provided by the employer on the rig was not a perquisite under Section 17(2)(iii). Again, the specific reasoning is not provided but is linked to the earlier judgment. The appeal was disposed of accordingly, with no order as to costs.

What were the issues?

The High Court was asked to decide two questions of law referred under Section 260A of the Income Tax Act: 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 boarding facility provided by the employer on the rig is not a perquisite under Section 17(2)(iii)? The Revenue's contentions are not explicitly recorded in the judgment. However, by answering the questions, the Revenue implicitly argued that 'OFF Period Salary' was taxable and that free boarding was a perquisite. The assessee's contentions are also not explicitly recorded, but their position was that 'OFF Period Salary' was not taxable and free boarding was not a perquisite. The judgment relies on a prior decision of the same court in Income Tax Act Appeal No. 57 of 2002, Commissioner of Income Tax, Dehradun & another V/s SEDCO Forex International Drilling Co. Ltd.

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

2003:UHC:3356

M/s Reading & Bates Exploration Co., As agent of Mr. P. Conyers, New Delhi ………. Respondent Mr. S.K. Posti Advocate for appellants. None for the respondent.

IN THE HIGH COURT OF UTTARANCHAL AT NAINITAL

Income Tax Appeal No. 48 of 2003

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 boarding facility provided by the employer on the rig is

The order continues below.

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