SEDCO FOREX INTERNATIONAL DRILL.INC.&ORS vs COMMNR. OF INCOME TAX, DEHRUDUN

The Supreme Court addressed the applicability of Section 9(1)(ii) of the Income Tax Act, 1961 concerning the taxation of salaries paid to employees during field breaks outside India. The Court held that the salary for field breaks was taxable as it was intrinsically linked to the services rendered in India, affirming the High Court's decision that such income was 'earned' in India. The Court dismissed the appeals, upholding the assessment made by the authorities based on the nexus between the training during field breaks and the offshore drilling operations in India.