R and B FALCON DRILLING CO.AGENT MARTIN KELLY vs. THE COMMISSIONER OF INCOME - TAX DEHRADUN

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ITA/23/2005HC UttarakhandUKHC01004232200523 December 2005Author: HON'BLE MR. JUSTICE M. M. GHILDIYAL1 pages
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What did the High Court hold?

The High Court held that the amount paid to the assessee for 'off period' salary shall not be included in the income accrued. This decision was based on the binding precedent set by the Hon'ble Supreme Court in Civil Appeal nos. 351-355 of 2005, with connected Civil Appeals, in the case of Sedco Forex International Drill Inc. and others vs. Commissioner of Income Tax, Dehradun and another, reported in Judgment Today 2005(9) SC 639. The High Court answered the framed question in favour of the assessee and against the revenue. No order as to costs was made. The appeal was decided accordingly.

What were the facts?

The assessee, M/s R & B Falcon Drilling Co. as Agent of Mr. Martin Kelly, filed an appeal before the High Court of Uttaranchal at Nainital against the order of the Income Tax Appellate Tribunal, New Delhi. The appeal pertains to the assessment year 1999-2000. The core of the dispute revolves around whether salary paid to the assessee for an 'off period' should be included in the income accrued, as per the explanation to Section 9(1)(ii) of the Income Tax Act, 1961. The procedural history indicates that the High Court heard arguments from both the appellant and the respondent (The Commissioner of Income Tax, Dehradun).

What were the issues?

1. Whether the amount paid to the assessee for 'off period' salary shall be included in the income accrued in view of the explanation of Section 9(1)(ii) of the Income Tax Act, 1961? (Question of law) Assessee's Contention: The assessee argued that the 'off period' salary should not be included in the accrued income. The judgment does not explicitly record the assessee's arguments beyond framing the issue, but implies their stance by seeking a favorable decision. Revenue's Contention: The revenue contended that the 'off period' salary should be included in the accrued income. The judgment does not explicitly record the revenue's arguments beyond framing the issue, but implies their stance by seeking a favorable decision.

Which sections of the Income-tax Act were involved?

Section 260A,Section 9(1)(ii)

AI-generated summary — verify with the full judgment below

HIGH COURT OF UTTARANCHAL AT- NAINITAL.

Income Tax Appeal No. 23 of 2005

M/s R & B Falcon Drilling Co. As Agent of Mr. Martin Kelly,

….. ….. Respondent.

Km. Krishi Shukla, Adv. & Sri Udyog Shukla, Advocate for the appellant, Sri S.K. Posti, learned counsel for the respondent.

Hon’ble M.M. Ghildiyal, J. Hon’ble B.S. Verma, J.

Heard learned counsel for both the parties.

The assessee has filed the present appeal u/s 260A of Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal, New Delhi for the assessment year 1999- 2000. Though, several questions have been framed in the memo of appeal but in substance the only question involve in this appeal is that “whether the amount paid to the assessee for off period salary shall be included in the income accrued in view of the explanation of Section 9(1) (ii) of the Act 1961”?

Since the said question has already been decided by the Hon’ble Supreme Court in Civil Appeal nos. 351-355 of 2005 appeal is decided in view of the judgment of Hon’ble the Supreme Court and the question is answered in favour of the assessee and against the revenue. No order as to costs.

The appeal is decided accordingly.

(B.S. Verma, J.) (M.M. Ghildiyal, J.) December 23, 2005: SKSharma:

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