READINGand BATES DRILING CO.AGENT MR.FRITZ VERLINDEN vs. THE COMMISSIONER OF INCOME TAX

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ITA/119/2004HC UttarakhandUKHC01003858200428 September 20052 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the appeal, following its own earlier Division Bench judgment in Commissioner of Income Tax and another Vs. Sedco Forex International Drilling Co. Ltd. and connected cases reported in (2003) 264 ITR 320. In that precedent, the Court had held that salary paid for the 'off period' was income earned in India, i.e., for services rendered in India, and was taxable under Section 9(1)(ii) of the Income Tax Act, 1961. The High Court found no reason to deviate from this established position. Therefore, the Tribunal's decision to tax the 'off period' salary was upheld.

What were the facts?

The appellant, M/s Reading & Bates Drilling Co. as agent of Mr. Fritz Verlinden, filed an appeal against the order dated 26.03.2004 passed by the Income Tax Appellate Tribunal, Delhi Bench ‘F’, New Delhi. The appeal pertains to Assessment Year 1997-1998. The dispute concerns the taxability of 'off period' salary paid to the appellant in India. The appellant is the assessee, and the respondent is the Commissioner of Income Tax, Dehradun. The appeal was heard by the High Court of Uttaranchal at Nainital.

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, under Section 9(1)(ii) of the Income Tax Act, 1961. Assessee's contention: The judgment does not record any specific arguments made by the assessee. Revenue's contention: The judgment does not record any specific arguments made by the revenue.

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. 119 of 2004 M/s Reading & Bates Drilling Co. as agent of Mr. Fritz Verlinden 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. 1525/Del/2000. The appellant is the assessee. The dispute relates to the Assessment Year 1997-1998. 2. The substantial question 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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