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

ITA/38/1999HC UttarakhandUKHC01015003200426 June 2004Bench: OTHER1 pages

AI SummaryAllowed

What did the High Court hold?

The High Court held that the Income Tax Appellate Tribunal was justified in directing the application of single state grossing up of tax perquisites paid by ONGC on behalf of the assessee, instead of the multi-state grossing up applied by the Assessing Officer. The Court's decision was squarely covered by its prior judgment dated 30th September, 2003, in Income Tax Appeal No. 470 of 2001 (Commissioner of Income Tax, Meerut & another Vs O.N.G.C., Dehradun). The question was answered in the affirmative, meaning in favour of the assessee and against the Department. The operative direction was to dispose of the appeal accordingly, with no order as to costs. The principle established is that single state grossing up is the correct method for tax perquisites paid by an employer on behalf of an employee in such circumstances, as per the precedent set in the cited appeal.

What were the facts?

This case involves the Commissioner of Income Tax (the Revenue) appealing against an order of the Income Tax Appellate Tribunal (ITAT). The assessee is Mr. Rochtchine Nikolai, represented by ONGC as his agent. The assessment year in question is 1990-91. The dispute concerns the method of grossing up tax perquisites paid by ONGC on behalf of the assessee. The Assessing Officer applied a 'multi-state grossing up', while the ITAT directed the application of 'single state grossing up'. The High Court is considering the appeal filed by the Revenue against the ITAT's decision.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the learned Income Tax Appellate Tribunal was justified in directing the application of single state grossing up of tax perquisites paid by ONGC on behalf of the assessee, instead of the multi-state 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. However, the ITAT's direction for single state grossing up implies the assessee argued for this method. Revenue's contention: The Revenue argued that the Assessing Officer was justified in applying multi-state grossing up.

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. 244 of 2001 Old No. 38/1999

The Commissioner of Income Tax Meerut & another … Appellants Versus ONGC, Tel Bhawan Dehradun as agent of Mr. Rochtchine Nikolai

… 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 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 in the circumstances of the case, learned Income Tax Appellate Tribunal was justified in directing to apply single state grossing up of the Tax Perquisites paid by ONGC on behalf of assessee instead of multi state 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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