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

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ITA/15/2005HC UttarakhandUKHC01004228200519 December 2005Author: HON'BLE MR. JUSTICE M. M. GHILDIYAL1 pages
AI SummaryAllowed

What did the High Court hold?

The High Court held that the amount paid to the assessee for off-period salary should not be included in the income accrued. The Court's decision was based on a prior ruling by the Hon'ble Supreme Court in Civil Appeal nos. 351-355 of 2005, titled Sedco Forex International Drill Inc. and ors. vs. Commissioner of Income Tax, Dehradun and another. The High Court found that this Supreme Court judgment directly addressed and decided the very question at hand. Therefore, the appeal was decided on the same terms as the Supreme Court's decision, with the question being answered in favour of the assessee and against the revenue. No specific operative directions beyond allowing the appeal were mentioned, and no issues were left undecided.

What were the facts?

The assessee, M/s R & B Falcon Drilling Co., acting as the agent of Mr. Eddie Branum, filed an appeal under Section 260A of the Income Tax Act, 1961. The appeal challenged an order passed by the Income Tax Appellate Tribunal, New Delhi. The core of the dispute revolved around whether the amount paid to the assessee for 'off period salary' should be included in the income accrued, as per the explanation to Section 9(1)(ii) of the Act. The procedural history indicates that the High Court heard arguments from both the assessee and the revenue.

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 amount paid for off-period salary should not be included in the income accrued. The judgment does not explicitly record the assessee's arguments beyond framing the issue. Revenue's contention: The revenue contended that the off-period salary should be included in the income accrued. The judgment does not explicitly record the revenue's arguments beyond framing the issue.

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. 15 of 2005

M/s R & B Falcon Drilling Co. As Agent of Mr. Eddie Branum,

….. ….. 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 against the order of the Income Tax Appellate Tribunal, New Delhi.

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 December 19, 2005: NCM:

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