COMMISSIONER INCOME TAX vs. M/S HUGHES SERVICES AGENT MR. MACKAY A,

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ITA/349/2000HC UttarakhandUKHC01013053200523 December 2005Author: HON'BLE MR. JUSTICE M. M. GHILDIYAL2 pages
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What did the High Court hold?

The High Court held that both questions of law had already been decided by the same court in the case of Commissioner of Income Tax and another Vs. Sedco Forex, reported in Volume 264 ITR page 320. In that precedent, both questions were answered in favour of the assessee and against the Department. Consequently, the High Court answered both questions in the affirmative, meaning in favour of the assessee and against the Revenue. The appeal was disposed of in accordance with this precedent, with no order as to costs. The specific reasoning from the Sedco Forex case was not detailed in this judgment, but it formed the basis for the decision.

What were the facts?

The appeal was filed by the Commissioner of Income Tax, Meerut, and the Deputy Commissioner of Income Tax, Special Circle, Dehradun (collectively referred to as the Revenue) against the judgment and order dated January 24, 2000, passed by the Income Tax Appellate Tribunal (ITAT), Delhi. The ITAT's order pertained to ITA No. 416/D/1993 for the assessment year 1989-90. The respondent in the appeal was M/s Hughes Services (FE) PTE Ltd., acting as the agent of Mr. Mackay A. The High Court was required to answer two questions of law arising from the ITAT's decision.

What were the issues?

The High Court was asked to decide two questions of law: 1. Whether, on the facts and circumstances of the case, the ITAT was legally justified in holding that free boarding and lodging facilities provided by the employer on board a rig in high seas cannot be construed as a perquisite under the Income Tax Act? 2. Whether, on the facts and circumstances of the case, the ITAT was legally justified in holding that interest under Section 234B of the Income Tax Act cannot be charged since the entire income of the assessee was subject to TDS, whereas this interest is chargeable on assessed tax as defined by the explanation below Section 234B? The Revenue contended that the ITAT's findings on these issues were legally incorrect. The judgment does not explicitly record the arguments made by the assessee or the specific provisions of law they relied upon, other than the implicit reliance on the ITAT's order. The Revenue's arguments are implied by the questions posed.

Which sections of the Income-tax Act were involved?

Section 234B

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF UTTARANCHAL AT NAINITAL.

Income Tax Appeal No. 104 of 2001 (Old No. 349 of 2000)

1.

The Commissioner of Income, Meerut.

2.

Deputy  Commissioner  of  Inco,me  Tax,  Special Circle, Dehradun. …Appellants

Versus

M/s Hughes Services (FE) PTE Ltd. as Agent of Mr. Mackay A., Dehradun

….Respondent.

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

Heard Sri S. K. Posti, learned counsel for the appellant and Sri Arvind Vashisth, learned counsel for the respondent.

The  present  appeal  is  filed  against  the  judgment  and order  dated  24.01.2000  passed  by  Income  Tax  Appellate Tribunal,  Delhi  in  ITA  No.  416/  D  /1993  pertaining  to  the assessment  year  1989  –  90. In  this  appeal  we  required  to answer two questions of law they are as follows:

Whether  on  the  facts  and  circumstances  of  the  case  ITAT was  legally  justified  in  holding  that  free  boarding  and  lodging facilities  provided  by  the  employer  on  board  the  rig  in  high  seas cannot be construed to be perquisite?

Whether  on  the  facts  and  circumstances  of  the  case  the learned  Tribunal  was  legally  justified  in  holding  that  interest under  section  234  B  of  the  IT  Act  cannot  be  charged  since  the entire  income  of  the  assessee  was  subject  to  TDS  whereas  this interest  is  chargeable  on  assessed  tax  as  defined  by  explanation below section 234 B? SKSharma

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