M/S B J SERVICES CO. AS AGENT OF MR. GLEN RIDLEY vs. INCOME TAX APPELLATE TRIBUNAL and ORS.

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ITA/88/2005HC UttarakhandUKHC01001742200505 September 20052 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the appeal. The Court followed its own earlier judgment in Commissioner of Income Tax and another Vs. SEDCO Forex International Drilling Co. Ltd. and connected cases (2003) 264 ITR 320. In that precedent, a Division Bench of the same High Court had held that payment of salary for the 'off period' constituted income earned in India for services rendered in India under Section 9(1)(ii) and was therefore taxable. The High Court found that this precedent was directly applicable to the present case, leading to the dismissal of the appeal. No issue was expressly left undecided.

What were the facts?

The assessee, M/s B. J. Services Co. Middle East, acting as an agent for Mr. Glen Ridley, filed an appeal against an order dated 27.10.2004 passed by the Income Tax Appellate Tribunal, Delhi Bench 'C'. The dispute pertains to the Assessment Year 1999-2000. The appeal was filed before the High Court of Uttaranchal at Nainital. The procedural history involves the assessee challenging the Tribunal's decision which had upheld the taxability of certain payments.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Tribunal was legally justified in treating the amount paid for the 'off period' as income earned in India, in view of the explanation to Section 9(1)(ii) of the Income Tax Act, 1961, despite no services being rendered in India during the 'off period'? 2. Whether the subsequent amendment to the explanation to Section 9(1)(ii) with effect from 01.04.2000, which regards payments for 'off period' or leave period as income accrued in India, indicates that such payments were not taxable in India prior to that amendment? The assessee contended that no services were rendered in India during the 'off period' and argued that the amendment to Section 9(1)(ii) effective from 01.04.2000 clarifies that 'off period' payments are taxable only from that date onwards. The revenue's contentions are not explicitly recorded in the judgment.

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. 88 of 2005 M/s B. J. Services Co. Middle East, as agent of Mr. Glen Ridley, Vikas Centre, 2nd Floor, S.V. Road, Santacruz (W), Mumbai. ……Appellant Versus 1. Income Tax Appellate Tribunal, Delhi Bench ‘C’ New Delhi. 2. Commissioner of Income Tax (Appeals), Dehradun. 3. Assistant Commissioner of Income Tax, Special Circle, Dehradun …Respondents Mr. V.K. Bist, Senior Advocate a/b Mr. A. Chatterji, Advocate for the appellant. Mr. S.K.Posti, Advocate for the respondents. 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 27.10.2004 passed by the Income Tax Appellate Tribunal, Delhi Bench ‘C’, New Delhi in I.T.A. No. 3368/Del/2001. The appellant is the assessee. The dispute relates to the Assessment Year 1999-2000. 2. The substantial question of law raised in the appeal is as follows:

“Whether on the facts and in the circumstances of the case, Tribunal is legally justified in treating the amount paid for the “off period” as the income earned in India in view of the explanation to section 9(1)(ii) while admittedly no service has been rendered during off period in India and inasmuch as, the subsequent amendment made in the explanation w.e.f. 01.04.2000 shows that the amount paid for “off period” or leave period is regarded as the income accrued in India only w. e. f. 01.04.2000?”

3.

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.)

19.09.

2005 19.09.2005 A

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