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

ITA/45/1999HC UttarakhandUKHC01015008200421 May 2004Bench: OTHER1 pages

AI SummaryPartly Allowed

What did the High Court hold?

The High Court held that the 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 under Section 195-A of the Income Tax Act, 1961. The Court based its decision on its prior judgment dated September 30, 2003, in Income Tax Appeal No. 470 of 2001, involving the same parties. The reasoning for this decision is not detailed in the provided text but is stated to be covered by the earlier judgment. The question was answered in the affirmative, favoring the assessee and against the Department. The appeal was disposed of accordingly, with no order as to costs.

What were the facts?

This case concerns Assessment Year 1990-91. The appellants are the Commissioner of Income Tax, Meerut, and another, while the respondent is O.N.G.C., Dehradun, representing Mr. Gousseinov Ali Gousem. The appeal challenges an order of 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, whereas 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 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 Tribunal's decision, which the High Court upholds, implies the assessee argued for 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?

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. 251 of 2001(Defective) (Old No. 45 of 1999)

The Commissioner of Income Tax, Meerut & another

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

Versus O.N.G.C., Dehradun As Representative of Mr. Gousseinov Ali Gousem .......... 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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