COMMISSIONER OF INCOME TAX vs. M/S HUGHES SERVICES AS AGENT H.PETER KAVIN

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ITA/68/2002HC UttarakhandUKHC01001721200502 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 finding that multiple-stage grossing up of income is not applicable to notional income determined under Section 44BB read with Section 195A of the Income Tax Act, 1961. The reasoning was based on a prior judgment of a Division Bench of the same High Court 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 affirmed the Tribunal's view that grossing up was not applicable in such circumstances. Consequently, the appeal filed by the revenue was dismissed.

What were the facts?

The appeal is filed by the Commissioner of Income Tax, Dehradun, and the Assistant Commissioner of Income Tax, Special Range, Dehradun, against an order dated June 8, 2001, passed by the Income Tax Appellate Tribunal (ITAT), Delhi Bench. The dispute pertains to Assessment Year 1992-93. The assessee is Mr. Hanson Peter Kavin, represented by his agent Huges Services (F.E.) Pte Ltd. The core of the dispute revolves around the applicability of grossing up to income determined notionally 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 any specific contentions made by the assessee. The High Court's decision relies on a previous judgment. Revenue's Contentions: The revenue, as the appellant, is challenging the ITAT's order which upheld the CIT(A)'s decision. The revenue's implicit contention is that the notional income under Section 44BB should be grossed 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

Cause title — parties, addresses and appearances
IN THE HIGH COURT OF UTTARANCHAL AT NAINITAL Income Tax Appeal No. 68 of 2002 1. The Commissioner of IncomeTax, Dehradun. 2. The Assistant Commissioner of Income Tax, Special Range, Dehradun. …Appellants Versus M/s Huges Services (F.E.) Pte. Ltd., as agent of Mr. Hanson Peter Kavin, 16-A, Poesv Garden, Madras. ….Respondent Mr. S.K. Posti, Advocate for the appellants. Mr. V.K. Bist, Senior Advocate a/b Mr. A. Chatterji, 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 8th June 2001 passed by the Income Tax Appellate Tribunal, Delhi Bench “SMC-II” in ITA. No. 1542/Del of 1994. The dispute relates to the Assessment Year 1992-

93.

The assessee is Mr. Hanson Peter Kavin, represented by Huges Services (F.E.) Pte Ltd.

2.

This 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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