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

ITA/115/1999HC UttarakhandUKHC01025144200318 May 2004Author: OTHER1 pages

AI SummaryAllowed

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 judgment dated September 30, 2003, in Income Tax Appeal No. 470 of 2001, which dealt with a similar issue involving the same parties. The Court answered the question in the affirmative, favoring the assessee and against the Department. The appeal was disposed of accordingly, with no order as to costs. The ratio decidendi is that single-stage grossing up is the correct method in such circumstances, as established by precedent.

What were the facts?

This case involves an appeal by the Commissioner of Income Tax, Meerut, and another against O.N.G.C., Dehradun, acting as agent for Mr. Krashtanov Victor. 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 a 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, challenging the Tribunal's order.

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 arguments made by the assessee. The decision relies on a previous judgment. Revenue's Contention: The revenue, represented by the Commissioner of Income Tax, argued that the Assessing Officer's method of multi-stage grossing up was correct. The judgment does not specify further details of the revenue's arguments or any authorities/precedents cited by them.

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. 322 of 2001 OLD NO. 115 / 1999

The Commissioner of Income Tax, Meerut & another

………… Appellants Versus

O.N.G.C., Dehradun As agent of Mr. Krashtanov Victor

………. Respondent

Hon.ble 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 questions 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 perquisities 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 questions 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. 18.05.2004 HN

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