COMMISSIONER OF INCOME TAX vs. HILLBURTON OFFLSHORE SERVICES.

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ITA/107/2000HC UttarakhandUKHC01015053200402 December 2005Author: HON'BLE MR. JUSTICE P. C. VERMA2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the substantial question of law raised in the appeal had already been decided by the Hon’ble Apex Court in Civil Appeal Nos. 351-355 of 2005, titled "Sedco Forex International Drill Inc. and Others Vs. Commissioner of Income Tax, Dehradun and Another, JT 2005(9) SC 639". Following this binding precedent, the question was answered in favour of the assessee. The reasoning was solely based on the Supreme Court's decision, which presumably clarified the taxability of such foreign-earned income under Section 9(1)(ii). The ratio decidendi is that if the Apex Court has ruled on a specific interpretation of a section concerning income earned outside India during an off-period, that ruling will govern subsequent cases. The appeal was dismissed accordingly, with no order as to costs.

What were the facts?

This appeal concerns the Assessment Year 1989-90 and challenges an order dated October 5, 1999, passed by the Income Tax Appellate Tribunal (Delhi Bench ‘SMC’ Delhi). The appellants are the Commissioner of Income Tax, Meerut, and the Assistant Commissioner of Income Tax, Special Circle, Dehradun. The respondent is M/s Halliburton Offshore Services Inc., acting as the agent of Mr. Cook R. The dispute revolves around the taxability of salary paid to the assessee for an off-period outside India. The procedural history indicates that the Tribunal's order is under challenge before the High Court.

What were the issues?

The Tribunal had to decide one substantial question of law: 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? The revenue contended that the salary paid for the off-period outside India was chargeable to Indian Income Tax. The assessee argued that such salary was not taxable in India. The judgment does not explicitly detail the arguments of each side beyond framing the question, but it implies the core of the dispute lies in the interpretation of Section 9(1)(ii) concerning income earned outside India.

Which sections of the Income-tax Act were involved?

Section 9(1)(ii)

AI-generated summary — verify with the full judgment below

COURT NO. 2

IN THE HIGH COURT OF UTTARANCHAL AT NAINITAL

Income Tax Appeal No. 109 of 2001 (Old No. 107 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. Cook R. C/o Arthur Anderson & Co. Maker Towers, F.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 05.10.1999, passed by the Income tax Appellate Tribunal, (Delhi Bench ‘SMC’ Delhi) in ITA No. 1359(Del) of 1993. The dispute relates to the Assessment Year 1989-90. 2. The substantial questions of law raised in the appeal are as follows:

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?”

3.

The aforementioned question has been decided by the Hon’ble Apex Court in Civil Appeal Nos. 351-355 of 2005 “Sedco of Income Tax, Dehradun and Another, JT 2005(9) SC 639”. In view of the aforesaid decision of the Hon’ble Apex Court, this question is answered in favour of the assessee.

4.

The appeal is dismissed accordingly. No order as to costs.

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

(P.C. Verma, J.) Shiv

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