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

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ITA/48/2000HC UttarakhandUKHC01025106200326 July 2004Bench: OTHER1 pages
AI SummaryDismissed

What did the High Court hold?

The High Court, comprising Hon’ble V.S. Sirpurkar, C.J., and Hon’ble P.C. Verma, J., dismissed the appeal. The Court found no reason to deviate from the view taken in the judgment reported in Volume 264 ITR Page 340 in the case of Commissioner of Income Tax & another Vs O.N.G.C. In that case, the Tribunal's decision that multiple state grossing up of income was not applicable to notional income under Section 44BB read with Section 195A of the Income Tax Act was upheld. The question of law referred to the High Court was answered in favour of the assessee. The operative direction was the dismissal of the appeal.

What were the facts?

This appeal concerns the assessment year 1989-90. The Commissioner of Income Tax, Meerut, and another are the appellants (Revenue), and ONGC, acting as an agent for M/s Cooper Energy Services Inc., is the respondent (assessee). The appeal challenges an order from the Income Tax Appellate Tribunal (ITAT). The Revenue's counsel conceded that the issue in this appeal is directly covered by a previous judgment of the High Court in the case of Commissioner of Income Tax & another Vs O.N.G.C., reported in 264 ITR 340. This prior judgment had decided the core issue in favour of the assessee.

What were the issues?

1. Whether the Tribunal was right in holding that the multiple state grossing up of income was not applicable to the notional income under Section 44BB read with Section 195A of the Income Tax Act, 1961? (Question of law) The Revenue's contention, as presented by its counsel, was that the appeal was covered by the judgment in Commissioner of Income Tax & another Vs O.N.G.C. (264 ITR 340), which had decided the question in favour of the assessee. No separate arguments were recorded for the Revenue beyond this concession. The assessee's arguments were not recorded, but the outcome indicates they relied on the aforementioned High Court precedent.

Which sections of the Income-tax Act were involved?

Section 44BB,Section 195A

AI-generated summary — verify with the full judgment below

Assessment Year 1989-90

IN THE HIGH COURT OF UTTARANCHAL AT NAINITAL

Income Tax Appeal No. 42 of 2001 (Old No. 48/2000)

The Commissioner of Income Tax, Meerut & another.

……… Appellants

Versus

ONGC as agent of M/s Cooper Energy Services Inc., Tel Bhawan, Dehradun.

……… Respondent

Mr. S.K. Posti, learned counsel for the appellants. Mr. J.P. Joshi, learned counsel for the respondent.

Hon’ble V.S. Sirpurkar, C.J., Hon’ble P.C. Verma, J.

Mr. S.K. Posti, learned counsel appearing on behalf of the Revenue very fairly says that the question involved in this appeal is directly covered by the judgment of Hon’ble Justice S.H. Kapadia and Hon’ble Justice Irshad Hussain reported in Volume 264 ITR Page 340 in the case of Commissioner of Income Tax & another Vs O.N.G.C.

The question there was whether the Tribunal was right in holding that the multiple state grossing up of income was not applicable to the notional income under Section 44BB read with Section 195A of the Income Tax Act. The learned Judges had decided the question in favour of the assessee.

We do not see any reason to take any different view than the one taken by our esteemed brothers.

The appeal is dismissed. The question of law referred is answered in favour of the assessee.

(P.C.Verma, J.) (V.S. Sirpurkar, C.J.) Dt. 26.07.2004

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