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

ITA/166/1999HC UttarakhandUKHC01000555200426 May 2004Bench: OTHER1 pages

AI SummaryAllowed

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, instead of the multi-stage grossing up applied by the Assessing Officer under section 195-A of the Income Tax Act, 1961. The Court found that the matter was squarely covered by its previous decision dated September 30, 2003, in Income Tax Appeal No. 470 of 2001 (Commissioner of Income Tax, Meerut & another Vs O.N.G.C., Dehradun). Consequently, the question was answered in the affirmative, in favour of the assessee and against the Department. The appeal was disposed of accordingly, with no order as to costs.

What were the facts?

This case involves the Commissioner of Income Tax (the Revenue) and ONGC, Dehradun, representing Mr. Damitri Zakailiauinvi (the assessee) for Assessment Year 1990-91. The appeal challenges an order passed by the Income Tax Appellate Tribunal (ITAT). The core issue revolves around 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 ITAT directed the application of a single-stage grossing up. The High Court is considering the correctness of the ITAT's direction.

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 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 assessee, represented by ONGC, argued for the application of single-stage grossing up of tax perquisites. Revenue's Contention: The Revenue, represented by the Commissioner of Income Tax, argued for the application of multi-stage grossing up, as applied by the Assessing Officer.

Which sections of the Income-tax Act were involved?

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. 502 of 2001 OLD NO. 166 OF 1999

The Commissioner of Income Tax, Meerut & another ........... Appellants Versus O.N.G.C., Dehradun As representative of Mr. Damitri Zakailiauinvi …………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.

Dt. 26.05.2004 HN (Rajesh Tandon, J.) (P.C. Verma, A.C.J.)

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