SEDCO FOREX INT. AS AGENT MR. G. MORINET vs. THE COMMISSIONER OF INCOME TAX

ITA/199/2001HC UttarakhandUKHC01003066200512 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 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 and other connected cases. In that earlier judgment, the Division Bench, which included one of the judges in the present case, had answered the questions framed in that appeal in favour of the Revenue. Therefore, by extension, the present appeal, which raised identical questions of law, was also decided against the appellant. The specific reasoning for the earlier judgment, which would form the ratio decidendi for this case, is not detailed in this excerpt, but it implies that the conditions for the AADT were not met, and the remuneration was indeed taxable in India. 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. G. Morinet, a Panamanian company, filed an appeal against a consolidated order dated April 20, 2000, passed by the Income Tax Appellate Tribunal (ITAT), Bench 'E', New Delhi, for the assessment year 1990-91. The appeal was filed before the High Court of Uttaranchal at Nainital. The appellant and the revenue agreed that only two specific questions of law were to be determined, and the rest of the framed questions were not pressed. The High Court noted that these questions had already been decided by a Division Bench of the same court in a previous case involving the same appellant.

What were the issues?

The Tribunal had to decide two questions of law. 1. Whether the ITAT 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'? 2. Whether the ITAT 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 ITAT erred in its findings on these two issues. The judgment does not record specific arguments from the revenue for each issue, but it is implied that the revenue supported the ITAT's findings. The appellant relied on the provisions of the AADT. The judgment does not explicitly name any specific authorities, circulars, or precedents relied upon by either side, other than referencing a prior judgment of the High Court.

AI-generated summary — verify with the full judgment below

COURT NO.2

IN THE HIGH COURT OF UTTARANCHAL AT NAINITAL

Income Tax Appeal No.199 of 2001

Sedco Forex International Drilling Inc. as agent of its employee Mr. G.Morinet 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 13, 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 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 and other connected cases. In the said judgment, the questions framed in the said appeal were answered in favour of the Revenue.

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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