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

ITA/57/1999HC UttarakhandUKHC01010560200424 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. This decision is based on the Court's prior judgment dated September 30, 2003, in Income Tax Appeal No. 470 of 2001, between the same parties. The Court answered the question in the affirmative, in favour of the assessee and against the Department. The appeal was disposed of accordingly, with no order as to costs. The specific reasoning from the prior judgment is not detailed in this extract, but the principle established is that single-stage grossing up is the correct method in this context.

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. Ivanor Nikolai, is the respondent. The 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 Income Tax Appellate Tribunal (ITAT) directed the application of a single-stage grossing up. The present appeal challenges the ITAT's order.

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 ITAT's decision in favour of single-stage grossing up implies the assessee 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 by the Assessing Officer, as reflected in the question posed.

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. 210 of 2001 Old No. 57/1999

The Commissioner of Income Tax Meerut & another ……… Appellants Versus O.N.G.C., Dehradun As agent of Mr. Ivanor Nikolai ………. 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 l e g a l l y 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. 24.05.2004 G

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