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

ITA/64/1999HC UttarakhandUKHC01015018200425 May 2004Bench: OTHER1 pages

AI SummaryAllowed

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. The Court's decision is based on its prior judgment dated September 30, 2003, in Income Tax Appeal No. 470 of 2001, involving the same parties and a similar issue. The ratio decidendi is that single-stage grossing up is the appropriate method in this context, as affirmed by the High Court. The appeal is disposed of in favour of the assessee and against the Department, with no order as to costs.

What were the facts?

This case involves the Commissioner of Income Tax, Meerut (appellants) and O.N.G.C., Dehradun, acting as agent for Mr. Chtchabylka Serguei (respondent). The assessment year is 1990-91. The appeal challenges an order passed by the Income Tax Appellate Tribunal. The core issue 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 a single-stage grossing up. This appeal is a continuation of a previous decision by the High Court.

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 specific arguments 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 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?

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. 216 of 2001(Defective) OLD NO. 64 OF 1999 The Commissioner of Income Tax, Meerut & another

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

Versus

O.N.G.C., Dehradun As agent of Mr. Chtchabylka Serguei .......... Respondent

Hon. P.C. Verma, A.C.J. Hon. Rajesh Tandon, J.

Mr. S.K. Posti, learned Advocate for the Tax Deptt. Mr. J.P. Joshi, Advocate 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. 25.05.2004

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