SEDCO FOREX DRILLING vs. THE COMMISSIONER OF INCOME TAX

ITA/14/2002HC UttarakhandUKHC01009107200308 December 2005Author: HON'BLE MR. JUSTICE P. C. VERMA2 pages

AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the appeal. It held that the two questions of law framed in the present appeal had already been answered 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 Income Tax Appeal No. 165 of 2001 and other connected cases. In that previous judgment, the questions framed were answered in favour of the Revenue. Therefore, following that precedent, the present appeal was dismissed. The reasoning for the previous judgment, which would form the ratio decidendi for this decision, is not elaborated upon in this text, but it clearly indicates that the appellant's arguments on both issues were rejected by the earlier Division Bench.

What were the facts?

The appellant, Sedco Forex International Drilling Inc., an agent for its employee Mr. G. Creff, a Panamanian company, filed an appeal against the consolidated order dated October 10, 2001, for assessment year 1991-92, passed by the Income Tax Appellate Tribunal (ITAT), Bench 'A', New Delhi. The appeal was preferred before the High Court of Uttaranchal at Nainital. The parties agreed that only two specific questions of law were to be determined in this appeal, and the rest were not pressed. The High Court noted that these questions had been previously answered by a Division Bench of the same court in a similar 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 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 ITAT erred in law by holding that the appellant is not governed by the provisions of the Agreement for Avoidance of Double Taxation (AADT)? Assessee's Contentions: The appellant argued that the ITAT erred in its findings on both questions of law. The specific arguments made by the appellant are not detailed in the judgment, other than that they framed these questions of law for determination. Revenue's Contentions: The revenue contended that the ITAT's findings were correct. The specific arguments made by the revenue are not detailed in the judgment, other than that they were represented by counsel and participated in the proceedings.

AI-generated summary — verify with the full judgment below

COURT NO.2

IN THE HIGH COURT OF UTTARANCHAL AT NAINITAL

Income Tax Appeal No.14 of 2002

Sedco Forex International Drilling Inc. as agent of its employee Mr. G.Creff 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 Range, Dehradun having office

at Subhash Road, Dehradun-248001

………. Respondents

Ms. 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).

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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