THE COMMISSIONER OF INCOME TAX vs. O.N.G.C. AS REPR. SOULTANAV T.A.

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ITA/119/1999HC UttarakhandUKHC01015059200402 September 20052 pages
AI SummaryDismissed

What did the High Court hold?

The High Court of Uttaranchal, 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, held that the Tribunal was correct in its decision. The Court found 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. The operative direction was to uphold the ITAT's order directing single-stage grossing up.

What were the facts?

The appeal concerns Assessment Year 1990-91 and challenges an order dated October 16, 1998, passed by the Income Tax Appellate Tribunal (ITAT), Delhi Bench "B". The assessee is Mr. Soultanov T.A., represented by ONGC, Dehradun. The appellants are the Commissioner of Income Tax, Meerut, and the Assistant Commissioner of Income Tax, Special Circle, Dehradun. The dispute revolves around the method of grossing up tax perquisites paid by ONGC on behalf of the assessee. The Assessing Officer applied multi-stage grossing up, while the ITAT 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 195A of the Income Tax Act, 1961? Assessee's Contention: The judgment does not record any specific arguments made by the assessee before the High Court. However, the ITAT's decision, which the High Court is considering, favored single-stage grossing up. Revenue's Contention: The revenue, represented by the Commissioner and Assistant Commissioner of Income Tax, argued that the Assessing Officer was justified in applying multi-stage grossing up under section 195A 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. 491 of 2001 (Old No. 119 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. Soultanov T.A. ….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 16th October 1998 passed by the Income Tax Appellate Tribunal, Delhi Bench “B” in ITA. No. 3532(D) of 1992. The dispute relates to the Assessment Year 1990-91. The assessee is Mr. Soultanov T.A., 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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