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

ITA/83/1999HC UttarakhandUKHC01015034200425 May 2004Bench: OTHER1 pages

AI SummaryPartly Allowed

What did the High Court hold?

The High Court held that the matter 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 decision, the Court had answered the question regarding single-stage versus multi-stage grossing up in favour of the assessee. Therefore, for the present appeal, the High Court answered the question in the affirmative, meaning in favour of the assessee and against the Department. The reasoning is based on the precedent established in the earlier appeal. The operative direction is that the appeal is disposed of in accordance with this finding.

What were the facts?

This case involves the Commissioner of Income Tax, Meerut (appellant) and ONGC, Dehradun, acting as agent for M/s Starkstorm UND-Singnal Budgelschaft GMBH (respondent assessee) for the assessment year 1990-91. The appeal challenges an order passed by the Income Tax Appellate Tribunal (ITAT). 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 ITAT directed a single-stage grossing up. The High Court is considering the appeal against the ITAT's decision.

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 explicitly record the assessee's arguments. However, the decision in favour of the assessee implies they argued for single-stage grossing up. Revenue's Contention: The revenue argued for multi-stage grossing up, as applied by the Assessing Officer, and contended that the ITAT's direction for single-stage grossing up was incorrect.

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. 235 of 2001(Defective) (Old No. 83 of 1999) The Commissioner of Income Tax, Meerut & another

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

Versus O.N.G.C., Dehradun As agent of M/s Starkstorm UND- Singnal Budgelschaft GMBH.

.......... 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. 25.05.2004

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