COMMISSIONER OF INCOME TAX vs. O.N.G.C. AS REPR. OF MR. GOZIMOV GUEILANI

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ITA/38/2002HC UttarakhandUKHC01007258200302 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 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 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. Therefore, following this established precedent, the appeal filed by the revenue was dismissed.

What were the facts?

The appeal concerns Assessment Year 1992-93 and challenges an order dated April 18, 2001, passed by the Income Tax Appellate Tribunal, Delhi Bench “A”. The assessee is Mr. Gazimov Guelani, represented by ONGC. The dispute revolves around the method of grossing up 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. The appeal is filed by the Commissioner of Income Tax and the Deputy Commissioner of Income Tax, Dehradun.

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 the application of single-stage grossing up of tax perquisites paid by ONGC on behalf of the assessee, instead of the 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 contentions made by the assessee before the High Court. However, the Tribunal's decision, which the High Court upholds, implies that single-stage grossing up was considered appropriate. Revenue's Contention: The revenue contended that the Assessing Officer was justified in applying multi-stage grossing up of the tax perquisites paid by ONGC on behalf of the assessee 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. 38 of 2002 1. The Commissioner of Income Tax, Dehradun. 2. Dy. Commissioner of Income Tax, Special Range-1, Dehradun. … Appellants Versus M/s Oil & Natural Gas Corporation as representative of Mr. Gazimov Guelani M/s V.V.O. Machinoimport USSR, 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 April 2001 passed by the Income Tax Appellate Tribunal, Delhi Bench “A”, in ITA. No. 6162(Del) of 1994. The dispute relates to the Assessment Year 1992-

93.

The assessee is Mr. Gazimov Guelani, 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 U/S 195 A of the Income Tax Act, 1961 ? ”

3.

A

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