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

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ITA/53/2000HC UttarakhandUKHC01025110200326 July 2004Bench: OTHER1 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the question of law involved in the appeal was directly covered by a previous judgment of their esteemed brothers in the case of Commissioner of Income Tax & another Vs O.N.G.C. (reported in 264 ITR 340). In that precedent, the issue was whether the Tribunal was correct in not applying multiple-stage grossing up to notional income under Section 44BB read with Section 195A of the Income Tax Act. The precedent had decided this question in favour of the assessee. The High Court found no reason to deviate from this established view. Therefore, the appeal was dismissed, and the question of law was answered in favour of the assessee. No specific amount in dispute was mentioned.

What were the facts?

This appeal concerns Assessment Year 1990-91. The Commissioner of Income Tax, Meerut, and another are the appellants (Revenue), and ONGC, acting as an agent for Mr. Bougourousl Anov Kons from USSR, is the respondent (assessee). The appeal challenges an order passed by the Income Tax Appellate Tribunal (ITAT). The core of the dispute revolves around the applicability of multiple-stage grossing up of income to notional income under Section 44BB read with Section 195A of the Income Tax Act, 1961. The Revenue is appealing a decision made by the ITAT in favour of the assessee.

What were the issues?

1. Whether the Tribunal was right in holding that multiple-stage grossing up of income was not applicable to the notional income under Section 44BB read with Section 195A of the Income Tax Act, 1961? Assessee's Contention: The judgment does not record any specific arguments made by the assessee. Revenue's Contention: The learned counsel for the Revenue fairly stated that the question involved in this appeal is directly covered by a judgment of Hon’ble Justice S.H. Kapadia and Hon’ble Justice Irshad Hussain reported in Volume 264 ITR Page 340 in the case of Commissioner of Income Tax & another Vs O.N.G.C. In that cited case, the question was whether the Tribunal was right in holding that the multiple-stage grossing up of income was not applicable to the notional income under Section 44BB read with Section 195A of the Income Tax Act, and the learned Judges decided the question in favour of the assessee.

Which sections of the Income-tax Act were involved?

Section 44BB,Section 195A

AI-generated summary — verify with the full judgment below

Assessment Year 1990-91 IN THE HIGH COURT OF UTTARANCHAL AT NAINITAL Income Tax Appeal No. 45 of 2001 (Old No. 53/2000)

The Commissioner of Income Tax, Meerut & another.

.......... Appellants

Versus

ONGC as agent of Mr. Bougourousl Anov Kons, C/o V.V.C. Machino, USSR, Tel Bhawan, Dehradun.

.......... Respondent

Mr. S.K. Posti, learned counsel for the appellants. Mr. J.P. Joshi, learned counsel for the respondent.

Hon’ble V.S. Sirpurkar, C.J., Hon’ble P.C. Verma, J.

Mr. S.K. Posti, learned counsel appearing on behalf of the Revenue very fairly says that the question involved in this appeal is directly covered by the judgment of Hon’ble Justice S.H. Kapadia and Hon’ble Justice Irshad Hussain reported in Volume 264 ITR Page 340 in the case of Commissioner of Income Tax & another Vs O.N.G.C.

The question there was whether the Tribunal was right in holding that the multiple stage grossing up of income was not applicable to the notional income under Section 44BB read with Section 195A of the Income Tax Act. The learned Judges had decided the question in favour of the assessee.

We do not see any reason to take any different view than the one taken by our esteemed brothers.

The appeal is dismissed. The question of law referred is answered in favour of the assessee.

(P.C. Verma, J.) (V.S. Sirpurkar, C.J.)

Dt. 26.07.2004

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