READING and BATES DRILING CO.AGENT MR. RICKY VINSON vs. THE COMMISSIONER OF INCOME TAX

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ITA/121/2004HC UttarakhandUKHC01003860200428 September 20052 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the "off period" salary paid to the appellant was liable to tax in India. This decision was based on a prior judgment by a Division Bench of the same High Court in the case of Commissioner of Income Tax and another Vs. Sedco Forex International Drilling Co. Ltd. and connected cases (2003) 264 ITR 320. In that precedent, it was held that salary paid for the "off period" constituted income earned in India, specifically for services rendered in India, and was taxable under Section 9(1)(ii) of the Income Tax Act, 1961. Consequently, following this binding precedent, the High Court dismissed the appeal.

What were the facts?

The appeal was filed by M/s Reading & Bates Drilling Co., acting as the agent of Mr. Ricky Vinson, 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 procedural history leading to this appeal involves the Tribunal's order which is now under challenge before the High Court.

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 assessee, M/s Reading & Bates Drilling Co., argued that the Tribunal erred in law by holding the "off period" salary taxable in India. Revenue's Contention: The judgment does not explicitly record the revenue's contentions. However, it refers to a previous High Court judgment that supports the taxability of "off period" salary.

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. 121 of 2004 M/s Reading & Bates Drilling Co. as agent of Mr. Ricky Vinson 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. 1527 /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, the appeal is dismissed.

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

28.09.

2005

28.09.

2005 A

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