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

ITA/294/1999HC UttarakhandUKHC01025231200321 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, instead of the multi-stage grossing up applied by the Assessing Officer under section 195-A of the Income Tax Act, 1961. The Court's decision was based on its prior judgment dated 30th September, 2003, in Income Tax Appeal No. 470 of 2001, between the same parties. The reasoning for this decision, as indicated by the reference to the earlier judgment, would have established the legal correctness of single-stage grossing up in this context. The operative direction was to dispose of the appeal in favor of the assessee and against the Department. No issue was expressly left undecided.

What were the facts?

This case involves the Commissioner of Income Tax (the Revenue) and ONGC, Dehradun, acting as agent for Mr. Citchebrikov Alexndre (the assessee). The assessment year in question is 1990-91. The appeal challenges an order passed by the Income Tax Appellate Tribunal (ITAT). The core 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. The High Court is hearing this appeal 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. However, the decision in favor of the assessee implies acceptance of their argument for single-stage grossing up. Revenue's contention: The Revenue contended that the Assessing Officer was correct in applying multi-stage grossing up under section 195-A of the Income Tax Act, 1961.

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. 349 of 2001 Old No. 294 of 1999

The Commissioner of Income Tax, Meerut & another

……. Appellants

Versus

O.N.G.C., Dehradun As agent of Mr. Citchebrikov Alexndre ….. 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 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 G

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