SEDCO FOREX INTERNATION DRILLING vs. THE COMMISSIONER OF INCOME TAX

ITA/6/2002HC UttarakhandUKHC01009099200309 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 and other connected cases. In that earlier judgment, the questions framed were answered in favour of the Revenue. Therefore, by applying the precedent, the High Court found no error in the ITAT's decision regarding the deductibility of remuneration and the applicability of the AADT. The specific reasoning from the earlier judgment, which would have addressed the conditions for deductibility and the scope of the AADT, is not detailed in this judgment but is referenced as the basis for dismissal. No issues were left undecided.

What were the facts?

The appellant, Sedco Forex International Drilling Inc., acting as an agent for its employee Mr. Ronald Grey, a Panamanian company, filed an appeal against the consolidated order dated May 31, 2001, for assessment year 1992-93, passed by the Income Tax Appellate Tribunal (Bench 'D', New Delhi). The appeal was preferred before the High Court of Uttaranchal at Nainital. The appellant and respondents were ready to argue the matter. The parties agreed that only two specific questions of law were to be determined, and the rest of the framed questions were not pressed.

What were the issues?

The Tribunal had to decide two questions of law: 1. Whether the learned I.T.A.T. erred in law in holding that the appellant 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 learned I.T.A.T. erred in law in 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 made by the revenue for each issue, but it is implied that the revenue supported the ITAT's decision.

AI-generated summary — verify with the full judgment below

COURT NO.2

IN THE HIGH COURT OF UTTARANCHAL AT NAINITAL

Income Tax Appeal No.06 of 2002

Sedco Forex International Drilling Inc. as agent of its employee Mr. Ronald Grey 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,

Meerut

The Assistant Commissioner of Income-Tax,

Special Circle, Dehradun having office

at Subhash Road, Dehradun-248001

………. Respondents

Mr. Tehmina Punwani, Senior Advocate for the appellant. Mr. S.K. Posti, Advocate for the respondents.

Dated: December 09, 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 31.05.2001 for the assessment year 1992-93, passed by the Income Tax Appellate Tribunal, (Bench ‘D’ 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 appellant 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

Recent GST High Court judgments

Search GST case law →