THE COMMISSIONER OF INCOME TAX MEERUT vs. O.N.G.C AS REPRESENTATIVE OF MR. VODOLAGA VASSILI

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ITA/28/2000HC UttarakhandUKHC01025096200321 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. The Court's decision is squarely covered by its prior judgment dated September 30, 2003, in Income Tax Appeal No. 470 of 2001, between the same parties. The question is answered in the affirmative, in favor of the assessee and against the Department. The appeal is disposed of accordingly, with no order as to costs. The ratio is that single-stage grossing up of tax perquisites paid by an employer on behalf of an employee is permissible under Section 195A of the Income Tax Act, 1961, as confirmed by precedent.

What were the facts?

This case involves an appeal by the Commissioner of Income Tax, Meerut, and another against ONGC, Dehradun, representing Mr. Vodalaga Vassili, 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 a single-stage grossing up. The High Court is considering the correctness of the Tribunal'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 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 195A of the Income Tax Act, 1961? Assessee's Contention: The judgment does not record any specific arguments made by the assessee. However, the Tribunal's decision, which is being upheld, favored single-stage grossing up. 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?

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. 361 of 2001 OLD NO. 28 OF 2000 The Commissioner of Income Tax, Meerut & another

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

Versus

O.N.G.C., Dehradun As representative of Mr. Vodalaga Vassili .......... 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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