ENSCO MARITIME LTD. vs. COMMISSIONER OF INCOME TAX DEHRADUN

ITA/196/2004HC UttarakhandUKHC01003934200402 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 that precedent case, similar questions of law were answered in favour of the Revenue. Therefore, the High Court held that the I.T.A.T. did not err in its findings concerning the deductibility of remuneration and the applicability of the AADT. The reasoning was based on the binding precedent established by the Division Bench. The operative direction was to dismiss the appeal. No issues were expressly left undecided.

What were the facts?

The appellant, Ensco Maritime Ltd. (formerly Dual Offshore Ltd.), acting as an agent for Mr. David Robert Johnson, filed an appeal against a consolidated order dated July 26, 2004, for the assessment year 1998-99. This order was passed by the Income Tax Appellate Tribunal (Bench 'F', 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, and the rest of the framed questions were not pressed. The appeal was heard by a Division Bench of the High Court.

What were the issues?

The Tribunal had to decide two questions of law: 1. Whether the learned I.T.A.T. 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'? This question pertains to the deductibility of remuneration under relevant tax provisions. 2. Whether the learned I.T.A.T. erred in law by 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 case. Contentions: Assessee: The appellant argued that the I.T.A.T. erred in its findings on both questions. Revenue: The judgment does not record specific arguments made by the revenue. However, the High Court's decision indicates that the revenue's position was upheld.

AI-generated summary — verify with the full judgment below

COURT NO.2

IN THE HIGH COURT OF UTTARANCHAL AT NAINITAL

Income Tax Appeal No. 196 of 2004

Ensco Maritime Ltd. (earlier known as Dual Offshore Ltd.) As agent of Mr. David Robert Johnson C/o Nangia & Company, Chartered Accountants, 75/7 Rajpur Road, Dehradun

…………….. Appellant

Versus

The Commissioner of Income Tax, Dehradun

…………… Respondents

Ms. Krishi Shukla, Advocate for the appellant. Mr. S.K. Posti, Advocate for the respondents.

Dated: December 02, 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 26.07.2004 for the assessment year 1998-99, passed by the Income Tax Appellate Tribunal, (Bench ‘F’ 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 a 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.) Shiv

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