TMI Blog2004 (7) TMI 66X X X X Extracts X X X X X X X X Extracts X X X X ..... rst question is answered in the negative, i.e., in favour of the Department and against the assessee and the other two questions are answered in the affirmative, i.e., in favour of the assessee - - - - - Dated:- 7-7-2004 - Judge(s) : P. C. VERMA., P. C. PANT. JUDGMENT This is an appeal under section 260A of the Income-tax Act, 1961 filed by the Revenue against the judgment and order dated February 28, 2001, passed by the Income-tax Appellate Tribunal, New Delhi, in I.T.A. No. 1723/Delhi of 1995. Mr. B. Bruson, the respondent is a non-resident foreign technician employed by a foreign company, Reading and Bates Exploration Co., which in the year under consideration executed contracts in India. During the year under consideration, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Heard learned counsel for the parties and perused the record. As this court has discussed in Income-tax Appeal No. 57 of 2002 CIT v. Sedco Forex International Drilling Co. Ltd. [2003] 264 ITR 320 the reasoning regarding question No. 1 is given in the following paragraphs: Section 4 of the Act is the charging section. It imposes tax on the total income of the previous year of every person. Under section 4(2), tax is deducted at source or paid in advance, where it is so deductible or payable. Section 5(2), on the other hand, restricts the scope of total income of a non-resident to the income which is received or deemed to be received in India or which accrues or which is deemed to accrue to him during such year. Section 9(1)(ii), int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rest period. We do not find any merit. After 35/28 days of hard work, the technician had to go back to the country of his residence. The off period followed the on period. They both formed part of an integral scheme. That even under the Finance Act of 1999 the new Explanation uses the term "rest period/ leave period". For the above reasons we find merit in the arguments of the Revenue. Further even assuming that the period following the on period was a standby arrangement and not a rest period, we find that the assessee had to undergo training during the said period. It is important to note that the work on the oil rigs is hazardous. The assessee had to remain fit during the rest period. Hence, he had to undergo demonstrations and training ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and physically fit. Therefore the payment of salary for off period was income earned in India, i.e., for services rendered in India under section 9(1)(ii). We would like to point out that in this case the assessment records show that from the income of the Indian operations the salary in its entirety (including salary for the off period) has been paid by the employer company. This conduct shows the intention of the contracting parties. Hence, the entire salary for both the periods was taxable in India under section 9(1)(ii). The reasoning regarding question No. 2 is as under: In this case, the assessee had to work on the rig. It was hazardous, arduous and continuous. Under such circumstances free food and beverages is a necessity. It i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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