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

ITA/35/1999HC UttarakhandUKHC01015000200426 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 195-A of the Income Tax Act, 1961. The Court's decision was based on its prior ruling in Income Tax Appeal No. 470 of 2001 dated 30th September, 2003, which addressed the same issue. The reasoning for this decision is not detailed in this excerpt but is stated to be covered by the previous judgment. 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.

What were the facts?

This case involves an appeal by the Commissioner of Income Tax, Meerut, and another against ONGC, Dehradun, as the representative of Mr. I. Jarine, for the assessment year 1990-91. The appeal challenges an order passed by the Income Tax Appellate Tribunal. 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 Tribunal directed the application of single-stage grossing up. The High Court noted that the matter was squarely covered by its previous decision in a similar appeal.

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 195-A 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 direction for single-stage grossing up implies the assessee likely argued for this method. 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 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. 242 of 2001(Defective) (Old No. 35 of 1999)

The Commissioner of Income Tax, Meerut & another

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

Versus

O.N.G.C., Dehradun As representative of Mr. I. Jarine

............. 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. 26.05.2004

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