SECO FOREX INTERNATION DRILLING vs. THE COMM8ISSIONER OF INCOME TAX

ITA/15/2002HC UttarakhandUKHC01009109200308 December 2005Author: HON'BLE MR. JUSTICE P. C. VERMA2 pages

AI SummaryDismissed

What did the High Court hold?

The High Court of Uttaranchal at Nainital dismissed the appeal. The Court referred to a previous judgment by a Division Bench of the same Court, in which one of the present judges was a member, 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 prior judgment, the questions framed in that appeal, which were similar to the two questions pressed by the appellant in the present case, were answered in favour of the Revenue. Therefore, following the precedent set by its own Division Bench, the Court dismissed the present appeal, implying that the Tribunal's findings on both issues were upheld.

What were the facts?

The appellant, Sedco Forex International Drilling Inc., acting as an agent for its employee Mr. R.K. Lega, a Panamanian company, filed an appeal against a consolidated order dated October 10, 2001, for assessment year 1991-92, passed by the Income Tax Appellate Tribunal (Bench 'A', New Delhi). The appeal was preferred before the High Court of Uttaranchal at Nainital. The appellant initially framed multiple questions for determination but later decided to press only two specific questions. The respondents are the Commissioner of Income Tax, Meerut, and the Assistant Commissioner of Income-Tax, Dehradun.

What were the issues?

The Tribunal had to decide the following 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'? This issue turns on the interpretation of provisions related to the deductibility of remuneration in the context of international taxation. 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)? This question concerns the applicability of the AADT to the appellant's situation. The appellant argued that the Tribunal erred in its findings on these two issues. The judgment does not record specific arguments made by the revenue on these points, other than implying they supported the Tribunal'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.15 of 2002

Sedco Forex International Drilling Inc. as agent of its employee Mr. R.K. Lega 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 Range, 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 08, 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 10.10.2001 for the assessment year 1991-92, passed by the Income Tax Appellate Tribunal, (Bench ‘A’ New Delhi).

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 has 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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