COMMISSIONER INCOME TAX vs. O.N.G.C. OF M/S EASTMAN CHRISTENSEW

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ITA/34/2001HC UttarakhandUKHC01007257200302 September 20052 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the appeal, following 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. The ratio decidendi is that notional income under Section 44BB, when read with Section 195A, does not necessitate a multiple-stage grossing up under Section 195. The operative direction is the dismissal of the appeal, affirming the ITAT's order.

What were the facts?

The appeal is filed by the Commissioner of Income Tax and the Deputy Commissioner of Income Tax against an order dated July 18, 2000, passed by the Income Tax Appellate Tribunal (ITAT), Delhi Bench 'A'. The assessment year in dispute is 1992-93. The assessee is M/s Eastman Christensen, represented by the Oil & Natural Gas Corporation Ltd. (ONGC). The core of the dispute revolves around the grossing up of income determined on a notional basis under Section 44BB of the Income Tax Act, 1961, in relation to Section 195 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 justified in holding that the income determined on a notional basis in accordance with Section 44BB of the Income Tax Act was not liable to be grossed up (multiple stage) under Section 195 of the Income Tax Act? Assessee's Contention: The judgment does not record any specific contentions made by the assessee before the High Court. However, the ITAT's decision, which is being upheld, implies that the assessee argued against the multiple-stage grossing up of notional income under Section 44BB read with Section 195A. Revenue's Contention: The revenue, represented by the appellants, contended that the income determined on a notional basis under Section 44BB should be subject to multiple-stage grossing up under Section 195 of the Income Tax Act.

Which sections of the Income-tax Act were involved?

Section 44BB,Section 195,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. 34 of 2001 1. The Commissioner of Income Tax, Meerut. 2. Deputy Commissioner of Income Tax (Assessment), Special Range-1, Dehradun. … Appellants Versus ONGC as agent of M/s Eastman Christensen, Oil & Natural Gas Corporation Ltd., Tel Bhawan, 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 18th July 2000 passed by the Income Tax Appellate Tribunal, Delhi Bench ‘A’, in I.T.A. No. 4218/Del of 1994. The dispute relates to the Assessment Year 1992-93. The assessee is M/s Eastman Christensen, 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 justified in holding that the income determined on notional basis in accordance with section 44BB of Income Tax Act was not liable to be grossed up (Multiple Stage) under section 195 of the Income Tax Act ? ”

3.

A

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