ENSCO MARITIME LTD. vs. COMMISSIONER OF INCOME TAX DEHRADUN

ITA/167/2004HC UttarakhandUKHC01004929200402 May 2006Author: HON'BLE MR. JUSTICE P. C. VERMA2 pages

AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the appeal, following its own prior Division Bench judgment in the case of 'Secdo Forex International Inc. Vs. The Commissioner of Income Tax and another', decided on July 22, 2005. In that precedent, similar questions of law were answered in favour of the Revenue. Therefore, the High Court held that the appellants' case was governed by that earlier decision. The specific findings on the two questions of law, as per the precedent, were that the conditions for non-deductibility of remuneration in the other state were not satisfied, and consequently, the appellants were not governed by the AADT. The operative direction was to dismiss the appeal.

What were the facts?

The appeal was filed by Ensco Maritime Ltd., acting as agent for Mr. Stephen Henry Holloway, against the Commissioner of Income Tax, Dehradun. The assessment year in question is 1998-99. The appeal challenges a consolidated order dated July 26, 2004, passed by the Income Tax Appellate Tribunal (Bench 'F', New Delhi). The parties agreed that only two specific questions of law were to be determined, and the rest were not pressed. The High Court noted that these questions had been previously answered by a Division Bench of the same court in a similar case.

What were the issues?

The Tribunal had to decide the following questions of law: 1. Whether the learned I.T.A.T. erred in law by holding that the appellants failed to satisfy the condition that 'the remuneration is not deductible in computing the profits of an enterprise chargeable to tax in that other State'? This question pertains to the deductibility of remuneration and its taxability in another state. 2. Whether the learned I.T.A.T. erred in law by holding that the appellants are not governed by the provisions of the Agreement for Avoidance of Double Taxation (AADT)? This question concerns the applicability of the AADT to the appellants. Assessee's Contentions: The judgment does not record specific contentions made by the assessee for these issues. The assessee's counsel appeared but did not press the majority of the framed questions. Revenue's Contentions: The judgment does not record specific contentions made by the revenue for these issues. The revenue's counsel appeared, and the court referenced a previous judgment where the revenue's position was upheld.

AI-generated summary — verify with the full judgment below

COURT NO.2

IN THE HIGH COURT OF UTTARANCHAL AT NAINITAL

Income Tax Appeal No. 167 of 2004

Ensco Maritime Ltd. (earlier known as Dual Offshore Ltd.) As agent of Mr. Stephen Henry Holloway C/o Nangia & Company, Chartered Accountants, 75/7 Rajpur Road, Dehradun

………..Appellant

Versus

The Commissioner of Income Tax, Dehradun

… Respondents

Ms. Krishi Shukla, Advoacte for the appellant. Mr. P. Maulekhi, Advocate for the respondent.

Dated: May 2, 2006

Coram: Hon. P.C. Verma, J. Hon. B.C. Kandpal, J.

Both the parties are ready to argue the matter today.

This appeal has been preferred against the consolidated order dated 26.07.2004 for the assessment year 1998-99, passed by the Income Tax Appellate Tribunal (Bench ‘F’ New Delhi).

The learned counsel for the parties agree that only the following questions of law arise in this appeal for the determination. They do not press the rest of the questions framed in the appeal:-

“Whether, the learned I.T.A.T. has erred in law in holding that the appellants have failed to satisfy the condition that ‘the remuneration is not deductible in computing the profits of an enterprise chargeable to tax in that other State’?” 2. “Whether, the learned I.T.A.T. has erred in law in holding that the appellants are not governed by the provisions of the Agreement for Avoidance of Double Taxation (AADT)?”

The aforementioned questions were answered by a Division Bench of this Court {in which one of us (P.C.Verma,J.) was a member} in case of “Secdo Forex another”, which was decided on 22.07.2005 in Income Tax Appeal No. 165 of 2001 and other connected cases. In the said judgment, the questions framed in the said appeal were answered in favour of the Revenue.

Following the above-mentioned judgment of a Division Bench of this Court, we dismiss this appeal.

(B.C. Kandpal, J.)

(P.C. Verma, J.)

Rajeev Dang

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