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

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ITA/147/1999HC UttarakhandUKHC01025174200321 May 2004Bench: OTHER1 pages
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What did the High Court hold?

The High Court held that 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, as opposed to the multi-stage grossing up applied by the Assessing Officer under Section 195A of the Income Tax Act, 1961. The Court's decision is squarely covered by its prior judgment dated September 30, 2003, in Income Tax Appeal No. 470 of 2001, involving the same parties. The question raised is answered in the affirmative, in favour of the assessee and against the Department. The appeal is disposed of accordingly, with no order as to costs. The principle established is that single-stage grossing up is the correct method for tax perquisites in this context, as per the precedent.

What were the facts?

The appeal concerns Assessment Year 1990-91. The Commissioner of Income Tax (CIT), Meerut, and another are the appellants, and ONGC, Dehradun, acting as agent for Mr. Abramov Juri, is the respondent. The matter under challenge is the Income Tax Appellate Tribunal's (ITAT) direction to apply 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. This issue arises under Section 195A of the Income Tax Act, 1961. The High Court is deciding this appeal based on a previous decision in a similar case.

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 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? The Assessee (ONGC as agent) contended that single-stage grossing up should be applied. The Revenue (CIT) contended that multi-stage grossing up, as applied by the Assessing Officer, was correct. The judgment does not explicitly detail the arguments of each side beyond the core issue of grossing up, but it references a prior decision which presumably covered these arguments.

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. 382 of 2001 Old No. 147/1999

The Commissioner of Income Tax, Meerut & another ……… Appellants Versus O.N.G.C., Dehradun As agent of Mr. Abramov Juri ………. 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 l e g a l l y 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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