COMMISSIONER INCOME TAX vs. O.N.G.C. AS AGENT M/S FLOW PETROL TEL. BHAWAN

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ITA/27/2001HC UttarakhandUKHC01009113200330 November 2005Author: HON'BLE MR. JUSTICE P. C. VERMA2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the appeal filed by the revenue. The Court followed its own previous judgment in Commissioner of Income Tax, Meerut and another Vs. ONGC as agent of Cooper Engineering Services International Incorporated and connected cases, reported in (2003) 264 ITR 340. In that prior decision, a Division Bench of the High Court had held that the Income Tax Appellate Tribunal was correct in its view that multiple stage grossing up of income was not applicable to notional income computed under Section 44BB read with Section 195A of the Income Tax Act, 1961. Therefore, the High Court found no reason to interfere with the Tribunal's order and dismissed the present appeal.

What were the facts?

The appeal was filed by the Commissioner of Income Tax and the Dy. Commissioner of Income Tax against an order dated 06.06.2000 passed by the Income Tax Appellate Tribunal (Delhi Bench 'A'). The dispute pertains to the Assessment Year 1991-92. The respondent is ONGC, acting as an agent for M/s Flow Petrol. The core of the dispute revolves around the tax treatment of income determined on a notional basis under Section 44BB of the Income Tax Act, 1961, specifically whether it was liable to be grossed up multiple times under Section 195A.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was legally correct in holding that income determined on a notional basis in accordance with Section 44BB of the Income Tax Act, 1961, was not liable to be grossed up (multiple stage) under Section 195A of the Income Tax Act? Assessee's Contention: The judgment does not record any specific contentions made by the assessee (ONGC). Revenue's Contention: The revenue, represented by the Commissioner of Income Tax and Dy. Commissioner of Income Tax, contended that the notional income determined under Section 44BB should be subject to multiple stage grossing up under Section 195A.

Which sections of the Income-tax Act were involved?

Section 44BB,Section 195A

AI-generated summary — verify with the full judgment below

COURT NO.2

IN THE HIGH COURT OF UTTARANCHAL AT NAINITAL

Income Tax Appeal No.27 of 2001

1.

The Commissioner of Income Tax, Meerut.

2.

Dy. Commissioner of Income Tax (Assessment), Special Range-I, Dehradun. ………. Appellants

Versus

ONGC as agent of M/s Flow Petrol, Tel Bhawan, Dehradun ………. Respondent

Dated: November 30, 2005

Mr. S.K. Posti, Advocate for the appellants. Mr. J.P. Joshi, Advocate for the respondent.

Coram: Hon. P.C. Verma, J. Hon. J.C.S. Rawat, J.

This appeal is against the order dated 06.06.2000, passed by the Income Tax Appellate Tribunal, (Delhi Bench ‘A’ New Delhi) in ITA No.4216(Del) of 1994. The dispute relates to the Assessment Year 1991-92. 2. The substantial question of law raised in the appeal is as follows:

“Whether on the facts and in the circumstances of the case, the learned Income Tax Appellate Tribunal was legally correct in holding the income determined on notional basis in according with Section 44BB of Income Tax Act, 1961 was not liable to be Grossed Up (multiple stage) under Section 195 A of the Income Tax Act?’’

3.

Following the above-mentioned judgment of a Division Bench of this Court, we dismiss this appeal.

(J.C.S. Rawat, J.)

(P.C. Verma, J) Rajeev Dang

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