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

ITA/104/1999HC UttarakhandUKHC01010520200426 June 2004Bench: OTHER1 pages

AI SummaryPartly Allowed

What did the High Court hold?

The High Court held that the Income Tax Appellate Tribunal was justified 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. The Court answered the question in the affirmative, in favour of the assessee and against the Department. The reasoning is based on a prior decision of the same Court in Income Tax Appeal No. 470 of 2001, dated 30th September, 2003, which covered the same matter. The operative direction is that the appeal is disposed of in terms of the aforementioned decision. No order as to costs was made.

What were the facts?

This case concerns Assessment Year 1990-91. The appeal was filed by the Commissioner of Income Tax, Meerut, and another against O.N.G.C., representing Mr. Akhmetchine Ravil. 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, which was challenged by the assessee. The Income Tax Appellate Tribunal directed the application of a single-stage grossing up. The present appeal is before the High Court of Uttaranchal at Nainital, challenging the Tribunal's order.

What were the issues?

1. Whether, on the facts and circumstances of the case, the learned Income Tax Appellate Tribunal was justified 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 assessee argued that single-stage grossing up of tax perquisites is the correct method. (Not explicitly stated, but implied by the Tribunal's decision in their favour). Revenue's contention: The revenue contended that the Assessing Officer was justified in applying multi-stage grossing up of tax perquisites. (Not explicitly stated, but implied by the appeal against the Tribunal's order).

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 UTTARANHAL AT NAINITAL

I.T.A. No. 256 of 2001 OLD NO. 104 OF 1999 The commissioner of Income Tax, Meerut & another

... Appellants

Versus

O.N.G.C, as representative of Mr. Akhmetchine Ravil Tel Bhawan, Dehradun

... Respondent

Hon'ble M.M. Ghildiyal, J. Hon'ble Rajesh Tandon, J.

Mr. S.K. Posti, learned Advocate for Income Tax Department. 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 on the facts and circumstances of the case learned Income Tax Appellate Tribunal was justified in directing to apply single stage grossing up of the Tax perquisites paid by ONGC on behalf of 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.) (M.M. Ghildiyal, J.) 26.06.2004 NCM

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