COMMISSIONER INCOME TAX vs. HALLIBURTON OFFSHORE SERVICES

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ITA/159/2000HC UttarakhandUKHC01015069200402 December 2005Author: HON'BLE MR. JUSTICE P. C. VERMA2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court addressed the two substantial questions of law. For the first question, regarding the chargeability of salary paid for an off-period outside India under Section 9(1)(ii), the Court referred to the Hon'ble Apex Court's decision in Civil Appeal Nos.351-355 of 2005, "Sedco Forex International Drill Inc. and Others Vs. Commissioner of Income Tax, Dehradun and Another". Based on this precedent, the question was answered in favour of the assessee. For the second question, concerning the imposition of interest under Section 234-B, the Court relied on a Division Bench decision of the same High Court in "Commissioner of Income Tax and another Vs. Sedco Forex International Drilling Co. Ltd. and connected cases" reported in (2003) 264 ITR 320. This ruling held that the imposition of interest under Section 234-B was not justified without affording a hearing and without providing reasons. Consequently, the appeal was dismissed, with both questions being answered against the Revenue and in favour of the assessee.

What were the facts?

The Commissioner of Income Tax, Meerut, and the Assistant Commissioner of Income Tax, Special Circle, Dehradun (the Revenue) filed an appeal before the High Court of Uttaranchal at Nainital. The appeal was against an order dated 29.09.1999, passed by the Income Tax Appellate Tribunal (Delhi Bench 'C') in ITA No.4322 (Del) of 1993. The dispute pertained to Assessment Year 1990-91. The assessee in this case is M/s Halliburton Offshore Services Inc., acting as the agent of Mr. Chayka R.S. The appeal challenges the Tribunal's decision on two specific questions of law.

What were the issues?

The High Court had to decide two substantial questions of law: 1. Whether the salary paid to the assessee for an off-period outside India was chargeable to Indian Income Tax under Section 9(1)(ii) of the Income Tax Act, 1961. - Assessee's contention: Not recorded in the judgment. - Revenue's contention: Not recorded in the judgment. 2. Whether interest could be charged under Section 234-B in view of the definition of 'assessed tax' provided by Explanation I of the Income Tax Act, 1961. - Assessee's contention: Not recorded in the judgment. - Revenue's contention: Not recorded in the judgment.

Which sections of the Income-tax Act were involved?

Section 9(1)(ii),Section 234-B

AI-generated summary — verify with the full judgment below

COURT NO.2 IN THE HIGH COURT OF UTTARANCHAL AT NAINITAL Income Tax Appeal No.127 of 2001 (Old no.159 of 2000)

1.

The Commissioner of Income Tax, Meerut

2.

Assistant Commissioner of Income Tax, Special Circle,

Dehradun …..Appellants Versus

M/s Halliburton Offshore Services Inc. as agent of Mr. Chayka R.S. C/o Arthur Anderson & Co. Maker Tower, P.Cuffe Parade, Bombay …Respondent

Dated: December 02, 2005

Mr. S.K. Posti, Advocate for the appellants. Ms. Krishi Shukla, Advocate for the respondent.

Coram: Hon. P.C. Verma, J. Hon. J.C.S. Rawat, J.

This appeal is against the order-dated 29.09.1999, passed by the Income Tax Appellate Tribunal, (Delhi Bench ‘C’ Delhi) in ITA No.4322 (Del) of 1993. The dispute relates to the Assessment Year 1990-91. 2. The substantial question of law raised in the appeal are as follows:

(i) Whether on the facts and in the circumstances of the case, the learned Income Tax Appellate Tribunal was legally correct to hold that the salary paid to the assessee for the said off-period outside India was not chargeable to Indian Income Tax Act in terms of Section 9(1)(ii) of the Income Tax Act, 1961?”

(ii) Whether on the facts and in the circumstances of the case, the learned Income Tax Appellate Tribunal was legally correct to hold that no interest can be charged u/s 234-B in view of the definition of the assessed tax given in by Explanation I of I.T. Act, 1961?”

3.

The first question has been decided by the Hon’ble Apex Court in Civil Appeal Nos.351-355 of 2005 “Sedco Forex Income Tax, Dehradun and Another, JT 2005(9) SC 639.” In view of the aforesaid decision of the Hon’ble Apex Court, this that the imposition of interest under Section 234-B was not justified without hearing and without reasons.

5.

In view of the above, we dismiss the appeal. Both the questions in this appeal are answered against the Revenue and in favour of the assessee.

(J.C.S. Rawat, J.)

(P.C. Verma, J.) Shiv

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