READING and BATES DRILING CO.AGENT MR. RODNEY DOUCET vs. THE COMMISSIONER OF INCOME TAX

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ITA/122/2004HC UttarakhandUKHC01003861200428 September 20052 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the appeal, following its own Division Bench judgment in Commissioner of Income Tax vs. Sedco Forex International Drilling Co. Ltd. and connected cases (2003) 264 ITR 320. In that precedent, the Court had held that salary paid for an 'off period' constituted income earned in India, as it was for services rendered in India, and was therefore taxable under Section 9(1)(ii) of the Income Tax Act, 1961. The High Court found no reason to deviate from this established position. The ratio decidendi is that 'off period' salary for services rendered in India is taxable in India under Section 9(1)(ii). The operative direction was to dismiss the appeal.

What were the facts?

The appeal is filed by M/s Reading & Bates Drilling Co., acting as the agent of Mr. Rodney Doucet, against an order dated March 26, 2004, passed by the Income Tax Appellate Tribunal, Delhi Bench ‘F’. The dispute pertains to the Assessment Year 1997-1998. The appellant is the assessee, and the respondent is the Commissioner of Income Tax, Dehradun. The core of the dispute revolves around the taxability of salary paid to the assessee during an 'off period'. The judgment does not specify the amount in dispute.

What were the issues?

1. Whether, on the facts and circumstances of the case, the Tribunal erred in law in holding that the 'off period' salary paid to the appellant was liable to tax in India? (Question of law, concerning Section 9(1)(ii) of the Income Tax Act, 1961). Assessee's Contentions: The judgment does not record any specific contentions made by the assessee. The appeal is disposed of based on a High Court precedent. Revenue's Contentions: The judgment does not record any specific contentions made by the revenue. The revenue is represented by counsel, but their arguments are not detailed.

Which sections of the Income-tax Act were involved?

Section 9(1)(ii)

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
IN THE HIGH COURT OF UTTARANCHAL AT NAINITAL Income Tax Appeal No. 122 of 2004 M/s Reading & Bates Drilling Co. as agent of Mr. Rodney Doucet C/o Nangia & Company, B-57, Soami Nagar, New Delhi- 110 017 … Appellant Versus The Commissioner of Income Tax, Dehradun. … Respondent Miss. Krishi Shukla/ Dr. Udyog Shukla, Advocates for the appellant. Mr. S.K.Posti, Advocate for the respondent. Coram: Hon. Cyriac Joseph, C.J. Hon. J.C.S. Rawat, J.

JUDGMENT

CYRIAC JOSEPH, C.J. (Oral)

1.

This appeal is filed against the order dated 26.03.2004 passed by the Income Tax Appellate Tribunal, Delhi Bench ‘F’, New Delhi in I.T.A. No. 1528 /Del / 2000. The appellant is the assessee. The dispute relates to the Assessment Year 1997-1998. 2. The substantial questions of law raised in the appeal is as follows:

Whether on the facts and circumstances of the case, the Tribunal erred in law in holding that the “off period” salary paid to the appellant was liable to tax in India.

3.

In Commissioner of Income Tax- and another Vs. Sedco Forex International Drilling Co. Ltd. and connected cases reported in (2003) 264 ITR 320, a Division Bench of this Court held that the payment of salary for “off period” was income earned in India, i.e., for services rendered in India

under Section 9(1)(ii) and that “off period salary” was taxable under section 9(1)(ii) of the Income Tax Act, 1961. 4. Following the above mentioned judgment of a Division Bench of this Court, this appeal is dismissed.

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

28.09.

2005

28.09.

2005 A

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