The Commissioner Of Income-Tax Dehradun And Another v. M/S Saipem S.p.a

Assessment Year 1990-91 IN THE HIGH COURT OF UTTARANCHAL AT NAINITAL Income Tax Appeal No.517 of 2001 The commissioner of Income-tax Dehradun and another …………... Appellants Versus M/s Saipem S.P.A. C/o M/s Arther Anderson & company 66 Marker Towers, F. Curre Road Bombay – 400 005. ……………. Respondent Mr. S.K. Posti, learned counsel for the appellants. Ms. Krishi Shukla, learned counsel for the respondent. Coram : Hon’ble P.C. Verma, J.Hon’ble P. C. Pant, J. This is an appeal preferred under Section 260A of the Income tax Act, 1961 filed by the Revenue against the judgment and order dated 26.02.2001 passed by the Income Tax Appellate Tribunal, New Delhi in I.T.A. No. 321/Del/95. 2) M/s Saipem S.P.A., respondent is a Company incorporated in Italy. In the year under consideration, it had been executing a drilling contract for O.N.G.C. 3) The substantial questions of law as framed in the appeal are as follows: 1.“Whether on the facts and in circumstances of the case, the learned Income Tax the Appellate Tribunal was not legally justified in upholding that free accommodation facility provided by the employer to its employee on board the rig in high seas cannot be construed to be perquisite. 2. Whether, on the facts and in the circumstances of the case, the learned I.T.A.T. was not legally justified in holding that no perquisite arose on account of free accommodation facility provided by the employer to its employee and the Assessment Authority was not justified in charging interest u/s 201 (1A) of the Income Tax Act?” 4) Heard learned counsel for the parties and perused the record. 5) As this Court has discussed in Income Tax Appeal No. 57 of 2002, in the case of Commissioner of Income-tax and another Vs. Sedco Forex International Drilling Co. Ltd. decided on 9[th] October, 2003; the reasoning regarding these questions are given as under: another Vs. Sedco Forex International Drilling Co. Ltd. In this case, assessee had to work on the rig. It was hazardous, arduous and continuous. Under circumstances free accommodation, food and beverages is a necessity. It is such not a luxury. It is not a perquisite. Its value cannot be added to the income of the assessee. Therefore, the Department cannot levy interest on the employer under Section 201/ 201 (1A) of the Income-tax Act. 6) In view of the above discussion, the above questions of law are answered in the affirmative i.e. in favour of the assessee and against the Department. 7) The Appeal is dismissed accordingly. No order as to costs. (P.C. Pant, J.) (P.C. Verma, J.) thDt. 16July, 2005. H.Negi