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

ITA/261/1999HC UttarakhandUKHC01000520200425 May 2004Bench: OTHER1 pages

AI SummaryAllowed

What did the High Court hold?

The High Court held that the Income Tax Appellate Tribunal (ITAT) 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 stated 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. The specific reasoning from the cited judgment was not reproduced, but the principle established was that single-stage grossing up is the correct method in this context.

What were the facts?

This case involves the Commissioner of Income Tax, Meerut (the Revenue) and ONGC, Dehradun, representing Mr. Boris Lantratov (the assessee) for the assessment year 1990-91. The appeal challenges an order passed by the Income Tax Appellate Tribunal (ITAT). The core 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 ITAT directed a single-stage grossing up. The High Court is hearing an appeal against the ITAT's decision. The present appeal is stated to be squarely covered by a previous decision of the same High Court in a similar matter.

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? Assessee's contentions: 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 contentions: The Revenue contended that the Assessing Officer was correct in applying multi-stage grossing up. The judgment does not detail the specific legal arguments or precedents relied upon by the Revenue, other than their disagreement with the ITAT's finding.

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. 505 of 2001 Old No. 261/1999

The Commissioner of Income Tax, Meerut & another ……… Appellants Versus O.N.G.C., Dehradun As representative of Mr. Boris Lantratov ………. 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. 25.05.2004 HN

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