THE COMMISSIONER OF INCOME TAX vs. O.N.G.C. AS REPR. OF MR. M.RAFEL

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ITA/41/1999HC UttarakhandUKHC01003811200402 September 20052 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the Tribunal was justified in directing the application of single-stage grossing up of tax perquisites. The Court followed its own earlier 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 multiple-stage grossing up of income was not applicable to notional income under section 44BB read with section 195A of the Income Tax Act, 1961. Consequently, the appeal filed by the revenue was dismissed.

What were the facts?

The appeal is filed by the Commissioner of Income Tax and the Assistant Commissioner of Income Tax against the order dated November 9, 1998, passed by the Income Tax Appellate Tribunal, Delhi Bench “B”. The dispute pertains to Assessment Year 1990-91. The assessee is Mr. Mamedtaguiev Rafael, represented by ONGC, Tel Bhawan, Dehradun. The core of the dispute involves the method of grossing up of tax perquisites paid by ONGC on behalf of the assessee. The Assessing Officer applied a multi-stage grossing up, while the Tribunal directed the application of single-stage grossing up.

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 directing to apply single-stage grossing up of tax perquisites paid by ONGC on behalf of the assessee, instead of multi-stage grossing up applied by the Assessing Officer under section 195-A of the Income Tax Act, 1961? Assessee's contentions: The judgment does not record any specific contentions made by the assessee before the High Court. However, the Tribunal's decision, which the High Court is upholding, was in favor of single-stage grossing up. Revenue's contentions: The revenue, represented by the Commissioner of Income Tax and the Assistant Commissioner of Income Tax, argued for the application of multi-stage grossing up by the Assessing Officer under section 195-A of the Income Tax Act, 1961.

Which sections of the Income-tax Act were involved?

Section 195A,Section 44BB

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. 247 of 2001 (Old No. 41 of 1999) 1. The Commissioner of Income Tax, Meerut. 2. The Assistant Commissioner of Income Tax, Special Circle, Dehradun. …Appellants Versus ONGC, Tel Bhawan, Dehradun as representative of Mr. Mamedtaguiev Rafael. ….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 9th November 1998 passed by the Income Tax Appellate Tribunal, Delhi Bench “B” in I. T. A. No. 3548 (Del) of 1992. The dispute relates to the Assessment Year 1990-

91.

The assessee is Mr. Mamedtaguiev Rafael, 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 directing to apply Single Stage Grossing up of the Tax perquisites paid by ONGC on behalf of the assessee, instead of Multi Stage Grossing Up, applied by the Assessing Officer under section 195- A of the Income Tax Act, 1961?”

3.

A

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