COMMISSIONER INCOME TAX vs. O.N.G.C. AS AGENT OF HALLIBURTON OFFSHOR

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ITA/18/2002HC UttarakhandUKHC01007254200302 September 20052 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the Income Tax Appellate Tribunal was correct in its decision. The Tribunal had upheld the order of the CIT(A) which found no scope for grossing up of income. 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 ruled 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 appeal filed by the revenue was dismissed. No issue was expressly left undecided.

What were the facts?

The appeal is filed by the Commissioner of Income Tax and Dy. Commissioner of Income Tax against an order dated January 23, 2001, passed by the Income Tax Appellate Tribunal, Delhi Bench "C" in ITA No. 2160/Del of 1993. The dispute pertains to Assessment Year 1991-92. The assessee is Halliburton Off-Shore Services Inc., represented by ONGC, Dehradun. The core issue revolves around the applicability of grossing up to income determined on a notional basis under Section 44BB of the Income Tax Act, 1961, in conjunction with Section 195A.

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 upholding the order of the CIT(A) that there is no scope for grossing up, and 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 contentions: The judgment does not record specific contentions made by the assessee. However, the Tribunal's order, upheld by the High Court, implies the assessee argued against the grossing up of notional income under Section 44BB read with Section 195A. Revenue's contentions: The revenue, represented by the Commissioner of Income Tax and Dy. Commissioner of Income Tax, contended that grossing up was applicable to the notional income determined under Section 44BB, in conjunction with Section 195A of the Income Tax Act, 1961.

Which sections of the Income-tax Act were involved?

Section 44BB,Section 195A

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
IN THE HIGH COURT OF UTTARANCHAL AT NAINITAL Income Tax Appeal No. 18 of 2002 1. The Commissioner of Income Tax, Dehradun. 2. Dy. Commissioner of Income Tax (Asstt.), Special Range-1, Dehradun. …Appellants Versus ONGC as agent of Halliburton Off-Shore Services Inc., Dehradun. ….Respondent Mr. S.K. Posti, Advocate for the appellants. Mr. J.P. Joshi, Advocate for the respondent. Coram: Hon. Cyriac Joseph, C.J. Hon. J.C.S. Rawat, J.

JUDGMENT

CYRIAC JOSEPH, C.J. (Oral)

1.

This appeal is against the order dated 23rd January 2001 passed by the Income Tax Appellate Tribunal, Delhi Bench “C” in ITA. No. 2160/Del of 1993. The dispute relates to the Assessment Year 1991-

92.

The assessee is Halliburton Off-Shore Services Inc., represented by ONGC., Tel Bhawan, Dehradun.

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 upholding the order of CIT (A) that there is no scope of Grossing- Up and that 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.

A

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