THE COMMISSIONER OF INCOME TAX vs. O.N.G.C. AS AGENT MR. CARAEV RAXIM

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ITA/61/1999HC UttarakhandUKHC01015015200402 September 20052 pages
AI SummaryDismissed

What did the High Court hold?

The High 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 the Tribunal was correct in its view 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 precedent, the High Court dismissed the appeal filed by the revenue. The specific finding on the issue was that Single Stage Grossing Up should be applied, not Multi Stage Grossing Up.

What were the facts?

The appeal is filed by the Commissioner of Income Tax, Meerut, and the Assistant Commissioner of Income Tax, Dehradun, against an order dated November 13, 1998, passed by the Income Tax Appellate Tribunal (ITAT), Delhi Bench “B”. The dispute pertains to Assessment Year 1990-91. The assessee is Mr. Caraev Rasim, represented by ONGC, Tel Bhawan, Dehradun. The core of the dispute involves the method of grossing up tax perquisites paid by ONGC on behalf of the assessee.

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 contention: The judgment does not record specific contentions for the assessee. Revenue's contention: The Assessing Officer applied Multi Stage Grossing Up. The Tribunal directed the application of Single Stage Grossing Up. The revenue challenges the Tribunal's direction.

Which sections of the Income-tax Act were involved?

Section 195A,Section 44BB

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF UTTARANCHAL AT NAINITAL

Income Tax Appeal No. 213 of 2001 (Old No. 61 of 1999)

1.

The Commissioner of Income Tax, Meerut. 2. The Assistant Commissioner of Income Tax, Dehradun.

… Appellants

Versus

ONGC Tel Bhawan, Dehradun as representative of Mr. Caraev Rasim.

...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 13th November 1998 passed by the Income Tax Appellate Tribunal, Delhi Bench “B”, in ITA. No. 7807/(Del) of 1992. The dispute relates to the Assessment Year 1990- 91. The assessee is Mr. Caraev Rasim, 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.

An identical question of law was considered by a Division Bench of this Court in the judgment in Commissioner of Income Tax, Meerut and another Vs. ONGC as agent of Cooper Engineering Services International Incorporated and connected cases, which was reported in

(2003) 264 ITR 340. In the above judgment, this Court held that the Tribunal was right in holding 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.

4.

Following the above mentioned judgment of a Division Bench of this Court, we dismiss this appeal.

(J.C.S. Rawat, J.)

(Cyriac Joseph, C.J.)

06.09.2005

06.09.2005

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