9911796707
TMI Blog2005 (6) TMI 24X X X X Extracts X X X X X X X X Extracts X X X X ..... uestion raised before us is as follows: "Whether, on the facts and circumstances of the case, the learned Income-tax Appellate Tribunal was legally correct in upholding the orders of the Commissioner of Income-tax (Appeals) that there is no scope of grossing up and that the income determined on 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?" Heard learned counsel for the parties and penised the record. As this court has discussed in Income-tax Appeal No. 470 of 2001: CIT v. ONGC [2003] 264 ITR 340 (Uttaranchal), dated September 30, 2003, the reasoning regarding this question is given in the following paragraphs. The main point, which i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y taking into account the benefit which it has received on account of ONGC paying tax on its behalf. For example, if the assessee has paid tax on Rs. 200 which is treated as its deemed profit, the Department has calculated that benefit at Rs. 250 by resorting to multi stage grossing up of income. This is not a case where the assessee is not paying tax on the benefit of Rs. 200. The dispute is only regarding the value of that benefit. According to the assessee the value of that benefit is Rs. 200, whether one takes the contract to be a protected contract or whether one takes that contract to be not protected. In both the cases the value of the benefit will remain constant. Therefore, there is no merit in the case of the Department. Lastly, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Rs. 1,000 and for the sake of simplicity, the tax rate is 10 per cent. ---------------------------------------------------------------- Stand of ONGC Income-tax Department's stand ---------------------------------------------------------------- Income &nb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bsp; --------- 1,111.00 Tax at 10% on Re. 1 0.10 &nbs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... --------- Taxable income 1,100 1,111 (Approx.) Tax at 10% 110.00 111.10 ---------------------------------------------------------------- For the reasons aforesaid, we answer this question in the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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