THE COMMISSIONER OF INCOME TAX and ANOTHER vs. O.N.G.C. AS AGENT OF MR KOLESNIKOV ALEXEL

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ITA/87/1999HC UttarakhandUKHC01025122200321 May 2004Bench: OTHER1 pages
AI SummaryAllowed

What did the High Court hold?

The High Court held that the income determined on a notional basis in accordance with Section 44BB of the Income Tax Act, 1961, was not liable to be grossed up under Section 195A of the Income Tax Act. The Court's decision was based on its prior judgment dated September 30, 2003, in Income Tax Appeal No. 470 of 2001, between the same parties. The reasoning followed the precedent set in that earlier case. The question was answered in the affirmative, favoring the assessee and against the Department. The appeal was disposed of accordingly, with no order as to costs.

What were the facts?

The appeal was filed by the Commissioner of Income Tax, Meerut, and another against O.N.G.C., Dehradun, acting as agent for M/s Schlumberger Asia Services, for the assessment year 1989-90. The dispute concerns the Income Tax Appellate Tribunal's decision. The High Court was hearing the appeal against the Tribunal's order. The procedural history indicates this matter is related to a previous decision by the same court.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the learned Income Tax Appellate Tribunal was legally correct in holding that the income determined on a notional basis in accordance with Section 44BB of the Income Tax Act, 1961, was not liable to be grossed up under Section 195A of the Income Tax Act? The Revenue contended that the income determined notionally under Section 44BB should be grossed up under Section 195A. The Assessee's contention is not explicitly recorded, but the High Court's decision implies the assessee argued against the grossing up of income determined under Section 44BB.

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

I.T.A. No. 275 of 2001 (Old No. 87 of 1999)

The Commissioner of Income Tax, Meerut & another

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

Versus O.N.G.C., Dehradun As agent of M/s Schlumberger Asia Services .......... Respondent

Mr. S.K. Posti, learned Advocate for Income Tax Department. Mr. J.P. Joshi, Advocate for respondent.

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

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 on the facts and in the circumstances of the case, learned Income Tax Appellate Tribunal was legally correct in holding that the income determined on notional basis in accordance with Section 44 BB of Income Tax Act, 1961 was not liable to be grossed up under Section 195 A of the Income Tax?”

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. 21.05.2004.

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