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

ITA/181/1999HC UttarakhandUKHC01001109200321 May 2004Bench: OTHER1 pages

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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. The Court's decision was based on its prior judgment dated September 30, 2003, in Income Tax Appeal No. 470 of 2001, between the same parties. The ratio decidendi is that single-stage grossing up is the correct method for calculating tax perquisites in such circumstances. The appeal was disposed of in favor of the assessee, with no order as to costs. The Court affirmed the Tribunal's direction for single-stage grossing up.

What were the facts?

This case involves an appeal by the Commissioner of Income Tax, Meerut, and another against O.N.G.C., Dehradun, representing Mr. M.F. Kourtchaguing, for the assessment year 1990-91. The appeal challenges an order passed by the Income Tax Appellate Tribunal. The core of 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 Tribunal directed the application of single-stage grossing up. The High Court of Uttaranchal at Nainital is hearing this appeal.

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 (respondent). Revenue's Contention: The revenue (appellants) argued that the Assessing Officer was correct in applying multi-stage grossing up. The judgment does not name any specific authorities, circulars, or precedents relied upon by the revenue.

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. 345 of 2001 OLD NO. 181 OF 1999 The Commissioner of Income Tax, Meerut & another

........... Appellants

Versus

O.N.G.C., Dehradun As representative of Mr. M.F. Kourtchaguing .......... Respondent

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

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

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