COMMISSIONER INCOME TAX vs. HALLIBURTON OFFSHORES SERVICE

PDF · subscribers
ITA/121/2000HC UttarakhandUKHC01015060200402 December 2005Bench: HON'BLE MR. JUSTICE P. C. VERMA2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court answered both questions in favour of the assessee and against the Revenue. For the first issue, the Court relied on the Hon'ble Apex Court's decision in Civil Appeal Nos. 351-355 of 2005, 'Sedco Forex International Drill Inc. and Others Vs. Commissioner of Income Tax, Dehradun and Another', JT 2005(9) SC 639, holding that the salary paid for the off-period outside India was not chargeable to Indian Income Tax. For the second issue, the Court referred to a Division Bench decision 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 reported in (2003) 264 ITR 320, which held that the imposition of interest under Section 234-B was not justified without affording a hearing and providing reasons. Consequently, the appeal filed by the Revenue was dismissed.

What were the facts?

The appeal was filed by the Commissioner of Income Tax, Meerut, and the Assistant Commissioner of Income Tax, Special Circle, Dehradun (collectively referred to as the Revenue) against an order dated September 29, 1999, passed by the Income Tax Appellate Tribunal, Delhi Bench ‘C’. The dispute pertains to Assessment Year 1991-92. The respondent is M/s Halliburton Offshore Services Inc., acting as an agent for Mr. Cnde M.L. The High Court of Uttaranchal at Nainital heard the appeal. The procedural history involves an appeal to the Tribunal, whose order is now under challenge before the High Court.

What were the issues?

The Tribunal had to decide two substantial questions of law: 1. Whether, on the facts and in the circumstances of the case, the salary paid to the assessee for an off-period outside India was chargeable to Indian Income Tax under Section 9(1)(ii) of the Income Tax Act, 1961? 2. Whether, on the facts and in the circumstances of the case, interest could be charged under Section 234-B in view of the definition of 'assessed tax' provided by Explanation I of the Income Tax Act, 1961? Assessee's contentions: The judgment does not record specific contentions made by the assessee before the High Court. However, the outcome indicates the assessee argued successfully against the chargeability of salary and the levy of interest. Revenue's contentions: The Revenue contended that the salary paid to the assessee for the off-period outside India was chargeable to Indian Income Tax under Section 9(1)(ii) and that interest under Section 234-B was leviable.

Which sections of the Income-tax Act were involved?

Section 9(1)(ii),Section 234-B

AI-generated summary — verify with the full judgment below

COURT NO. 2

IN THE HIGH COURT OF UTTARANCHAL AT NAINITAL

Income Tax Appeal No. 118 of 2001 (Old No. 121 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. Cnde M.L. C/o Arthur Anderson & Co. Maker Towers, P.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 29.09.1999, passed by the Income tax Appellate Tribunal, (Delhi Bench ‘C” Delhi) in ITA No. 4317 (Del) of 1993. The dispute relates to the Assessment Year 1991-92.

2.

The substantial questions of law raised in the appeal are as follows:

(i)

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?”

(ii)

Whether on the facts and in the circumstances of the case, the learned Income Tax Appellate Tribunal was legally correct to hold that no interest can be charged u/s 234-B in view of the definition of the assessed tax given in by Explanation I of I.T. Act, 1961?”

The first question has been decided by the Hon’ble Apex Court in Civil Appeal Nos.351-355 of 2005 “Sedco Forex International Drill Inc. and Others Vs. Commissioner 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.

So far question No. 2 is concerned, a Division Bench of this Court in the case of Commissioner of Income Tax and another Vs. Sedco Forex International Drilling Co. Ltd. and connected cases reported in (2003) 264 ITR 320, has held that that the imposition of interest under Section 234-B was not justified without hearing and without reasons.

In view of the above, we dismiss the appeal. Both the questions in this appeal are answered against the Revenue and in favour of the assessee.

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

(P.C. Verma, J.) Shiv

More judgments on Section 9(1)(ii)

All 123 judgments and leading authorities on Section 9(1)(ii) →

Recent GST High Court judgments

Search GST case law →