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

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ITA/12/2000HC UttarakhandUKHC01014996200429 May 2004Bench: OTHER1 pages
AI SummaryAllowed

What did the High Court hold?

The High Court held that 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. The Court's decision was based on its prior judgment dated September 30, 2003, in Income Tax Appeal No. 470 of 2001 (The Commissioner of Income Tax, Meerut & another Vs O.N.G.C., Dehradun). The ratio decidendi is that single-stage grossing up is the correct method in this context, as affirmed by the Tribunal and upheld by the High Court. The appeal was disposed of in favour of the assessee.

What were the facts?

The assessee is O.N.G.C., Dehradun, representing Mr. Jaden Victor. The assessment year is 1990-91. The appeal is filed by the Commissioner of Income Tax, Meerut, against an order of the Income Tax Appellate Tribunal (ITAT). The dispute concerns the method of grossing up of tax perquisites paid by ONGC on behalf of the assessee. The Assessing Officer applied multi-stage grossing up, while the ITAT directed single-stage grossing up under Section 195A of the Income Tax Act, 1961. This High Court judgment is a decision on the Commissioner's appeal against the ITAT's order.

What were the issues?

1. Whether, in the facts and 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? Assessee's Contention: The judgment does not record any specific contentions made by the assessee before the High Court. However, the High Court's decision in favour of the assessee implies acceptance of the ITAT's direction for single-stage grossing up. Revenue's Contention: The revenue, represented by the Commissioner of Income Tax, argued that the Assessing Officer was justified in applying multi-stage grossing up. The judgment does not explicitly detail the revenue's arguments or the authorities/precedents they relied upon, other than the fact that they are challenging the ITAT's order.

Which sections of the Income-tax Act were involved?

Section 195A

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. 355 of 2001 Old No. 12/2000

The Commissioner of Income Tax, Meerut

……… Applicant

Versus

O.N.G.C., Dehradun As representative of Mr. Jaden Victor

………. Respondent

Mr. S.K. Posti, learned Advocate for Income Tax Department. Mr. J.P. Joshi, Advocate for respondent.

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

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 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?”

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. 29.05.2004

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