DIRECTOR OF INCOME TAX Vs. DOLPHIN DRILLING LTD.

JUDGEMENT

(1.) Assessee entered into a contract with Alfa Crew.

(2.) The Tribunal has recorded a finding, which finding is not in dispute, that the entire salary of Rs. 26,45,59,780/- was paid to different people, who were foreigners and who earned those salaries by serving in India for a period of less than 90 days during the relevant assessment year. The fact remains that Section 192 of the Act deals with the obligation of the employer to deduct tax at source when salary is paid by the employer to its employees. If the payment, with which we are concerned, was salary, then it was obligatory on the part of the assessee to deduct tax on salary under Section 192 of the Act at the time of payment of salary. If the payment was not on account of salary, but on account of technical services, then the assessee was required to deduct tax at source in respect of such payment under Section 195 of the Act. The Tribunal, on facts, has come to a conclusion to the effect that the payment, with which we are concerned, was payment of salary and not payment on account of technical services. The facts, upon which the Tribunal has arrived at the said conclusion, are not being disputed in the appeal. If those facts are not disputed, then the one and the only conclusion would be that the payments, with which we are concerned, were payment of salary and not technical fees.

(3.) As aforesaid, under Section 192 of the Act, it was obligatory on the part of the assessee to deduct tax, but, as stated in section 192 of the Act, on the estimated income of the employee. In the instant case, as stated above, the employees, being foreigners and they having earned those salaries while working in India during a period less than 90 days, those salaries, in view of Section 10(6)(viii) of the Act, are not income of the employees in India. Therefore, the assessee employer, in the instant case, could not deduct any tax on those salaries under section 192 of the Act, though they were obliged to do so.