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

ITA/66/1999HC UttarakhandUKHC01015019200426 May 2004Bench: OTHER1 pages

AI SummaryPartly Allowed

What did the High Court hold?

The High Court held that the issue was squarely covered by its previous decision dated September 30, 2003, in Income Tax Appeal No. 470 of 2001, between the same parties. In that prior decision, the Court had answered the question regarding single-stage versus multi-stage grossing up in favor of the assessee. Therefore, for the present appeal, the High Court answered the question in the affirmative, meaning in favor of the assessee and against the Department. The ratio decidendi is that single-stage grossing up of tax perquisites is the correct method, as per the Court's prior ruling. The appeal was disposed of in accordance with this finding.

What were the facts?

The appeal concerns Assessment Year 1990-91. The Commissioner of Income Tax, Meerut (appellant) is challenging an order passed by the Income Tax Appellate Tribunal. The respondent is ONGC, Dehradun, representing Mr. Bespalov Viktor (assessee). 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 Tribunal directed the application of single-stage grossing up. The High Court is hearing the appeal against the Tribunal'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 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. Revenue's Contention: The revenue, represented by the Commissioner of Income Tax, argued that the Assessing Officer was correct in applying multi-stage grossing up. The judgment does not name any specific authorities, circulars, or precedents relied upon by the revenue.

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. 218 of 2001(Defective) (Old No. 66 of 1999)

The Commissioner of Income Tax, Meerut & another

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

Versus O.N.G.C., Dehradun As representative of Mr. Bespalov Viktor ............. 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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