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

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ITA/285/1999HC UttarakhandUKHC01025230200321 May 2004Bench: OTHER1 pages
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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 195A of the Income Tax Act, 1961. The court's decision was squarely covered by its prior judgment dated September 30, 2003, in Income Tax Appeal No. 470 of 2001, between the same parties. 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 accordingly, with no order as to costs.

What were the facts?

The appeal concerns Assessment Year 1990-91. The Commissioner of Income Tax (CIT), Meerut, and another are the appellants, and ONGC, Dehradun, acting as agent for Mr. P. Victor, is the respondent. The case involves a dispute regarding the grossing up of perquisites paid by ONGC on behalf of the assessee. The Assessing Officer applied multi-stage grossing up under Section 195A of the Income Tax Act, 1961, which was challenged by the assessee. The Income Tax Appellate Tribunal (ITAT) had directed the application of single-stage grossing up. The present appeal is before the High Court of Uttaranchal at Nainital.

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 195A of the Income Tax Act, 1961? Assessee's contention: The assessee contended that single-stage grossing up should be applied. The judgment does not explicitly record the assessee's arguments but implies their stance through the question posed and the court's decision. Revenue's contention: The revenue contended that multi-stage grossing up, as applied by the Assessing Officer, was correct. The judgment does not explicitly record the revenue's arguments but implies their stance through the question posed and the court's decision.

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. 348 of 2001 OLD NO. 285 OF 1999 The Commissioner of Income Tax, Meerut & another ........... Appellants Versus O.N.G.C., Dehradun As agent of Mr. P. Victor .......... 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. 21.05.2004 G (Rajesh Tandon, J.) (P.C. Verma, A.C.J.)

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