THE COMMISSIONER OF INCOME TAX vs. O.N.G.C. AS AGENT M/S BROWN and ROOT INT.

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ITA/547/2001HC UttarakhandUKHC01003883200402 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 High Court found no reason to deviate from this established legal position. Therefore, the order of the Tribunal upholding the CIT(A)'s decision that grossing-up was not applicable was affirmed.

What were the facts?

The appeal is filed by the Commissioner of Income Tax, Dehradun, and the Deputy Commissioner of Income Tax (Assessment), Special Range-1, Dehradun, against an order dated December 7, 2000, passed by the Income Tax Appellate Tribunal, Delhi Bench ‘A’. The dispute pertains to Assessment Year 1989-90. The assessee is M/s Brown and Root International Inc., represented by ONGC. The core of the dispute revolves around the applicability of grossing-up provisions to income determined notionally under Section 44BB of the Income Tax Act, 1961.

What were the issues?

1. Whether, on the facts and circumstances of the case, the learned Income Tax Appellate Tribunal was legally correct in upholding the orders 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, 1961? Assessee's contentions: The judgment does not record specific contentions made by the assessee. However, the fact that the CIT(A)'s order was upheld by the Tribunal implies the assessee likely argued against the grossing-up of notional income. Revenue's contentions: The revenue, as appellants, argued that the income determined notionally under Section 44BB should be subject to grossing-up under 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. 547 of 2001 1. The Commissioner of Income Tax, Dehradun. 2. Deputy Commissioner of Income Tax (Assessment), Special Range-1, Dehradun. … Appellants Versus M/s ONGC as agent of M/s Brown and Root International Inc., 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 7th December 2000 passed by the Income Tax Appellate Tribunal, Delhi Bench ‘A’, in I.T.A. No. 6149/Del of 1994. The dispute relates to the Assessment Year 1989-

90.

The assessee is M/s Brown and Root International 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 circumstances of the case the learned Income Tax Appellate Tribunal was legally correct in upholding the orders of CIT (A) that there is no scope of Grossing-Up and that the income determined on notional basis in accordance with Section 44 BB of Income Tax Act 1961 was not liable to be Grossed Up U/S 195 A of the Income Tax Act ?”

3.

A

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