COMMISSIONER INCOME TAX vs. O.N.G.C. AGNET OF M/S HITACHI ZOSEN ,JAPAN

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ITA/59/2000HC UttarakhandUKHC01025114200321 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 prior Division Bench 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 precedent, the Court had held that the 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 income determined on a notional basis under Section 44BB was not liable to be grossed up under Section 195A.

What were the facts?

This appeal by the Commissioner of Income Tax and Dy. Commissioner of Income Tax (Assessment) is against an order dated August 12, 1999, passed by the Income Tax Appellate Tribunal (Delhi Bench 'A'). The dispute pertains to the Assessment Year 1989-90. The respondent is ONGC, acting as an agent for M/s Hitachi Zosen, Japan. The core issue revolves around the taxability of income determined on a notional basis under Section 44BB of the Income Tax Act, 1961, and whether it should be grossed up under Section 195A of the Act.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the learned 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 under Section 195A of the Income Tax Act? Assessee's Contention: The judgment does not record any specific contentions made by the assessee (ONGC as agent of M/s Hitachi Zosen, Japan). Revenue's Contention: The revenue, through the Commissioner of Income Tax and Dy. Commissioner of Income Tax (Assessment), argued that the income determined notionally under Section 44BB should be subject to 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

IN THE HIGH COURT OF UTTARANCHAL AT NAINITAL Income Tax Appeal No. 49 of 2001 (Old No.59/2000)

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 Hitachi Zosen, Japan, Tel Bhawan, Dehradun

... Respondent

Dated: November 21, 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 12th August, 1999 passed by the Income Tax Appellate Tribunal, (Delhi Bench ‘A’ Delhi) in ITA No. 7291(Del) of 1992. The dispute relates to the Assessment Year 1989-90. 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 accordance with Section 44BB of Income Tax Act, 1961 was not liable to be Grossed Up under Section 195 A of the Income Tax Act ? ”

3.

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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