SEDCO FOREX INTERNATIONAL vs. COMMISSIONER OF INCOME TAX

ITA/202/2001HC UttarakhandUKHC01004963200414 December 2005Author: HON'BLE MR. JUSTICE P. C. VERMA2 pages

AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the appeal, following its own prior Division Bench judgment in the case of "Sedco Forex International Inc. Vs. The Commissioner of Income Tax and another," decided on July 22, 2005, in Income Tax Appeal No.165 of 2001. In that precedent, the questions framed in that appeal, which were similar to the questions in the present appeal, were answered in favour of the Revenue Department. Therefore, by applying the ratio decidendi of the earlier judgment, the High Court found no error in the Tribunal's decision and dismissed the present appeal. No specific findings on the individual issues were elaborated, as the decision rested on the binding precedent.

What were the facts?

The appellant, Sedco Forex International Drilling Inc., acting as an agent for its employee Mr. A. Thompson, filed an appeal against a consolidated order dated April 20, 2000, for assessment year 1989-90. This order was passed by the Income Tax Appellate Tribunal, Bench 'E', New Delhi. The appeal was preferred against the Commissioner of Income Tax, Meerut, and the Assistant Commissioner of Income-Tax, Special Circle, Dehradun. The parties agreed that only two specific questions of law were to be determined in this appeal, with other framed questions not being pressed.

What were the issues?

The Tribunal had to decide the following questions of law: 1. Whether 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 appellants are governed by the provisions of the Agreement for Avoidance of Double Taxation (AADT). The Assessee's contentions were not explicitly recorded in the judgment. The Revenue's contentions were also not explicitly recorded. However, the judgment refers to a previous decision on similar questions of law.

Which sections of the Income-tax Act were involved?

None explicitly mentioned in the provided text, other than implied reference to provisions governing DTAA and deductibility of remuneration.

AI-generated summary — verify with the full judgment below

COURT NO.2

IN THE HIGH COURT OF UTTARANCHAL AT NAINITAL

Income Tax Appeal No. 202 of 2001

Sedco Forex International Drilling Inc. as agent of its employee Mr. A. Thompson 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, Cuffe Parade, Mumbai

………… Appellant Versus

The Commissioner of Income Tax, Meerut

having office at Income Tax Office, Opp. Bhasali Ground,

Meerut

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 years 1989-90, passed by the Income Tax Appellate Tribunal, (Bench ‘E’ New Delhi).

The learned counsel for the parties agree that only the following 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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