THE COMMISSIONER OF INCOME TAX vs. O.N.G.C. AS AGENT MR. IVAN VORABIE

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ITA/78/1999HC UttarakhandUKHC01015030200402 September 20052 pages
AI SummaryDismissed

What did the High Court hold?

The High Court followed its own previous 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, a Division Bench of the High Court had held that the Tribunal was correct in concluding that Multiple Stage Grossing Up was not applicable to notional income under section 44BB read with section 195A of the Income Tax Act, 1961. Therefore, by following this established legal position, the High Court dismissed the present appeal. The specific finding on the issue was that Single Stage Grossing up was the correct method for notional income under the relevant sections, contrary to the Assessing Officer's Multi Stage Grossing Up. The ratio decidendi is that the principle established in the cited case applies directly to this appeal.

What were the facts?

The appeal concerns Assessment Year 1990-91 and is filed by the Commissioner of Income Tax and the Assistant Commissioner of Income Tax against an order dated October 16, 1998, passed by the Income Tax Appellate Tribunal, Delhi Bench “B”. The assessee is Mr. Ivan Vorobie, represented by ONGC, Tel Bhawan, Dehradun. 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'. This appeal challenges the Tribunal's direction.

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 Multi Stage Grossing Up applied by the Assessing Officer under section 195A of the Income Tax Act, 1961? Assessee's Contention: Not recorded in the judgment. Revenue's Contention: The Assessing Officer applied Multi Stage Grossing Up. The revenue, as appellants, is challenging the Tribunal's decision to apply Single Stage Grossing up.

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. 230 of 2001 (Old No. 78 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. Ivan Vorobie. ….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. 3513(D) of 1992. The dispute relates to the Assessment Year 1990-91. The assessee is Mr. Ivan Vorobie, 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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