THE COMMISSIONER OF INCOME TAX MEERUT vs. O.N.G.C AS REPRESENTATIVE OF MR. LAZAREV MIHAIL

ITA/27/2000HC UttarakhandUKHC01025095200321 May 2004Bench: OTHER1 pages

AI SummaryPartly Allowed

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. 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, between the same parties. The reasoning for this decision is based on the precedent established in the earlier judgment. The question was answered in the affirmative, in favour of the assessee and against the Department. The operative direction was to dispose of the appeal in accordance with this finding.

What were the facts?

The appeal concerns Assessment Year 1990-91. The Commissioner of Income Tax, Meerut (appellant) is challenging an order passed by the Income Tax Appellate Tribunal (ITAT). The respondent is ONGC, Dehradun, acting as an agent for Mr. Lezarev Mikhail (assessee). The dispute 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 a single-stage grossing up. This appeal was filed by the Revenue against the ITAT's decision.

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 Contention: The judgment does not record any specific contentions made by the assessee. The decision relies on a previous judgment. Revenue's Contention: The Revenue, represented by the Commissioner of Income Tax, argued that the Assessing Officer was correct in applying multi-stage grossing up under Section 195-A of the Income Tax Act, 1961, and that the ITAT's direction for single-stage grossing up was legally incorrect.

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. 360 of 2001 (Old No. 27 of 2000)

The Commissioner of Income Tax, Meerut & another

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

Versus O.N.G.C., Dehradun As agent of Mr. Lezarev Mikhail

.......... 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.

(Rajesh Tandon, J.)

(P.C. Verma, A.C.J.)

Dt. 21.05.2004

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