TMI Blog2006 (5) TMI 136X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. The first issue is with regard to the off-period salary. The assessees are technician employees of M/s Sedco Forex International Drilling Incorporation. The AO charged salary of the assessees for the entire year, including that of the off-period, earned by the assessees in the UK as residents of the UK, to tax. 3. Before the learned CIT(A), the assessees contended that the salary for the off-period was neither for rest period, nor for off-period, because during the 28 days outside India, the employees were available to the employer-company for various purposes like training, obtaining visas, etc., as enumerated in the work schedule. Various Tribunal decisions were cited. 4. The learned CIT(A) vide the impugned orders, held in the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... UK, since the contract did not mention that the salary was for a well earned rest, since the clause in the contract relating to salary paid for field break was not earned in India as it did not fall within the statutory fiction created by the phrase "earned in India", as contained in s. 9(1)(ii), the salary so paid was not for "service rendered in India", within the meaning of the 1983 Explanation to s. 9(1)(ii). Their Lordships also referred to the 1999 Explanation to s. 9(1)(ii) (i.e., the Explanation holding the field presently). It was held that even if this 1999 Explanation was held applicable, it was doubtful if the activity of the employees in the UK could be said to be "rest" or "leave" period as envisaged by cl. (b) of the 1999 Exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eir employer-company. This field break has been defined in the letter of agreement to include, but not to be limited to undergoing training by attending classes at specified places, on-the-spot demonstration to update the knowledge in the latest techniques and attending to the offshore drilling work on any project of the employer-company in any part of the world at the shortest notice of 24 hours, travelling to and from the drilling rig and obtaining visas, permits, etc. Thus, by the very wording of the agreement, "field break" is not equivalent to a rest period or a leave period as enshrined in the Explanation to s. 9(1)(ii). As held by the Hon'ble Supreme Court in the Sedco Forex, this is a period of readiness of the employees for service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not taxable in India. As such, this ground of appeal is rejected. 10. Apropos ground No. 2, the learned Departmental Representative has contended that the issue as to whether free boarding on the rig is perquisite in the hands of the employees/assessees, stands covered in favour of the assessee by the Uttaranchal High Court decision in the assessee's own case in CIT Anr. Vs. Sedco Forex International Drilling Co. Ltd. (2004) 186 CTR (Uttaranchal) 144 : (2003) 264 ITR 320 (Uttaranchal). In that case, the question whether free boarding was or was not a perquisite under s. 17(2)(iii), was decided in favour of the assessee. The Department has not brought any decision to the contrary before us. So, respectfully following Sedco Forex of the H ..... X X X X Extracts X X X X X X X X Extracts X X X X
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