THE COMMISSIONER OF INCOME TAX vs. O.N.G.C.

ITA/72/1999HC UttarakhandUKHC01015023200421 May 2004Author: OTHER1 pages

AI SummaryPartly Allowed

What did the High Court hold?

The High Court held that the Income Tax Appellate Tribunal was legally correct in directing the application of single-stage grossing up of tax perquisites paid by ONGC on behalf of the assessee, as opposed to the multi-stage grossing up applied by the Assessing Officer under section 195-A of the Income Tax Act, 1961. The Court's decision was based on its prior ruling in Income Tax Appeal No. 470 of 2001 dated 30th September, 2003, between the same parties. The question was answered in the affirmative, in favour of the assessee and against the Department. The operative direction was to follow the Tribunal's decision, implying the acceptance of single-stage grossing up. No issue was expressly left undecided.

What were the facts?

This case involves an appeal by the Commissioner of Income Tax, Meerut, and another against ONGC, Dehradun, acting as agent for Mr. Mouraviev Valentine. The assessment year in question is 1990-91. The dispute concerns 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 Income Tax Appellate Tribunal directed the application of single-stage grossing up. The present appeal is before the High Court of Uttaranchal at Nainital.

What were the issues?

1. Whether, in the facts and circumstances of the case, the learned Income Tax Appellate Tribunal was legally correct 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 195-A of the Income Tax Act, 1961? Assessee's Contention: The judgment does not record any specific contentions made by the assessee. Revenue's Contention: The revenue, through the Commissioner of Income Tax, argued that the Assessing Officer's application of multi-stage grossing up was correct, implying disagreement with the Tribunal's direction for single-stage grossing up. The revenue relied on the Assessing Officer's action.

Which sections of the Income-tax Act were involved?

Section 195-A

AI-generated summary — verify with the full judgment below

Assessment Year 1990-91

IN THE HIGH COURT OF UTTARANCHAL AT NAINITAL

I.T.A. No. 224 (defective) of 2001 Old. No. 72 of 1999

The Commissioner of Income Tax, Meerut & another ................. Appellants

Versus

O.N.G.C., Dehradun As agent of Mr. Mouraviev Valentine ................ Respondent

Hon. P.C. Verma, A.C.J. Hon. Rajesh Tandon, J.

Mr. S.K. Posti, learned counsel for the Tax Deptt. Mr. J.P. Joshi, learned counsel for the respondent.

The matter is squarely covered by our decision dated 30th September, 2003 in Income Tax Appeal No. 470 of 2001; The Commissioner of Income Tax, Meerut & another Vs O.N.G.C. Dehradun.

The question raised before us is as follows: "Whether in the facts and circumstances of the case the learned Income Tax Appellate Tribunal was legally correct 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?"

For the reasons recorded in the above judgment in Income Tax Appeal No. 470 of 2001 dated 30th September, 2003, we answer this question in the affirmative i.e. in favour of the assessee and against the Department. Appeal is disposed of accordingly. No order as to costs.

(Rajesh Tandon, J.) (P.C. Verma, A.C.J.) Dt. 21.05.2004. G

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