SEDCO FOREX INTERNATIONAL vs. THE COMMISSIONER OF INCOEME TAX and ANR.

ITA/194/2001HC UttarakhandUKHC01004958200414 December 2005Author: HON'BLE MR. JUSTICE P. C. VERMA2 pages

AI SummaryDismissed

What did the High Court hold?

The High Court held that the questions of law arising in this appeal were identical to those decided by a Division Bench of the same court in the case of Sedco Forex International Inc. Vs. The Commissioner of Income Tax and another, decided on July 22, 2005. In that prior judgment, the Division Bench had answered the framed questions in favour of the Revenue Department. Consequently, following its own precedent, the High Court dismissed the present appeal. The specific reasoning of the prior judgment is not detailed, but it is stated that the questions were answered in favour of the Revenue. No issue was expressly left undecided.

What were the facts?

The appellant, Sedco Forex International Drilling Inc., acting as an agent for its employee Mr. J.L. Molada, filed an appeal against a consolidated order dated April 20, 2000, for assessment year 1990-91, passed by the Income Tax Appellate Tribunal (Bench 'E', New Delhi). The appeal was preferred before the High Court of Uttaranchal at Nainital. The parties agreed that only questions of law arose for determination and did not press other framed questions. The High Court noted that the questions of law were previously answered by a Division Bench of the same court in a similar case, Sedco Forex International Inc. Vs. The Commissioner of Income Tax and another, decided on July 22, 2005.

What were the issues?

The Tribunal had to decide two questions of law: 1. Whether the Tribunal 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' under the relevant provisions of the Income Tax Act and the Double Taxation Avoidance Agreement (DTAA)? 2. Whether the Tribunal erred in law by holding that the appellants are not governed by the provisions of the Agreement for Avoidance of Double Taxation (AADT)? The appellant contended that the Tribunal's findings on these issues were erroneous. The revenue's contentions are not explicitly recorded in the judgment, but it is implied they supported the Tribunal's order. The judgment does not name specific authorities, circulars, or precedents relied upon by either side in this particular appeal, other than referencing a prior High Court judgment.

AI-generated summary — verify with the full judgment below

COURT NO.2

IN THE HIGH COURT OF UTTARANCHAL AT NAINITAL

Income Tax Appeal No. 194 of 2002

Sedco Forex International Drilling Inc. as agent of its employee Mr. J.L. Molada a company incorporated in the 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, Cuffee Parade, Mumbai

………. Appellant

Versus

The Commissioner of Income Tax, Meerut.

having office at Income Tax Office, Opp. Bhasali Ground

The Assistant Commissioner of Income-Tax,

Special Circle, Dehradun having office

at Subhash Road, Dehradun-248001

………. Respondents

Mr. Vikram Gulati, Advocate for the appellant. Mr. S.K. Posti, Advocate for the respondents.

Dated: December 14, 2005

Coram: Hon. P.C. Verma, J. Hon. J.C.S. Rawat, J.

Both the parties are ready to argue the matter today.

This appeal has been preferred against the consolidated order dated 20.04.2000 for the assessment year 1990-91, passed by the Income Tax Appellate Tribunal, (Bench ‘E’ New Delhi).

The learned counsel for the parties agree that only the 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’?”

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

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

(J.C.S. Rawat, J.) (P.C. Verma, J) Rajeev Dang

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