SEDCO FOREX DRILLING INC. AGENT MR.DUDLEY CARR vs. THE COMMISSIONER OF INCOME TAX and ANR.

ITA/44/2005HC UttarakhandUKHC01004239200522 December 2005Author: HON'BLE MR. JUSTICE M. M. GHILDIYAL2 pages

AI SummaryAllowed

What did the High Court hold?

The High Court noted that the issue had been decided by the Hon'ble Apex Court in the case of Sedco Forex International Drill Inc. and others Vs. Commissioner of Income Tax, Dehradun and Anr., reported in JT 2005 (9) SC 639. Following this Supreme Court judgment, the High Court decided the question in favour of the assessee/appellant and against the department. The appeal was disposed of in light of this decision, with no order as to costs. The specific reasoning of the Supreme Court or how it applied to the facts of this case is not detailed in the provided judgment, other than stating it was in favour of the assessee.

What were the facts?

The appellant, Sedco Forex International Drilling Inc., acting as an agent for its employee Mr. Dudley Carr, filed an appeal against an order passed by the Income Tax Appellate Tribunal (ITAT), New Delhi, dated October 29, 2004. The ITAT had rejected the appellant's claim for exemption from double taxation for the assessment year 1998-99. The Tribunal held that 'off period' salary was taxable in India. The appeal was filed before the High Court of Uttaranchal at Nainital.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Tribunal erred in law by holding that 'off period' salary was taxable in India under Section 19(1)(ii) of the Income Tax Act? Assessee's Contention: The assessee argued that the Tribunal erred in law by holding 'off period' salary as taxable in India under Section 19(1)(ii) of the Income Tax Act. Revenue's Contention: The judgment does not record any specific contentions made by the revenue.

Which sections of the Income-tax Act were involved?

19(1)(ii)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF UTTARANCHAL AT NAINITAL.

Income Tax Appeal No.44 of 2005

Sedco Forex International Drilling Inc. as agent of its Employee Mr. Dudley Carr a company incorporated in Republic of Panama having its registered office at no. 8, Acquitino de la Guardia Street, City of Panama, Republic of Panama, present address, C/o A.F. Ferguson & Co. Maker Towers, Cuffe Parade, Mumbai. …………. Appellant

Versus

The Commissioner of Income Tax, Dehradun having office at Subhash Road, Dehradun.

The Deputy Commissioner of Income Tax, Special Circle, Dehradun, having its office at Subhash Road, Dehradun.

………………Respondents

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

Heard Ms. Menka Tripathi, learned counsel for the appellant and Sri S. K. Posti, learned standing counsel for respondent.

Appellant has preferred this appeal against the order passed by Income Tax Appellate Tribunal, New Delhi dated 29.10.2004 rejecting the claim in respect of exemption from double taxation of the appellant for the assessment year 1998‐99 and holding that off period salary is liable to be taxed in India.

A question has rises for decision which is as under:

Whether on the facts and circumstances of the case the Tribunal erred in law for holding off period salary was taxable in India under Section 19 (1) (ii) of the Income Tax Act?

The question has been decided by Hon’ble Apex asessee / appellant and against the department.

Following the above mentioned judgment, the question is decided accordingly.

In view of the above, the appeal is disposed of. No order as costs.

(B.S. Verma, J) (M.M. Ghildiyal, J.)

December 22, 2005 SKSharma

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