Western Geco International Ltd. V. Assistant Commissioner of Income Tax Dehradun

ITA/212/2007

AI Insights

The case involves multiple appeals by M/s Western Geco International Ltd. against the Assistant Commissioner of Income Tax, Dehradun, concerning the assessment year 2003-04. The appeals were directed against the ITAT's order which upheld the Commissioner of Income Tax (Appeals)'s decision that tax paid by the employer on salaries is not exempt under Section 10(10CC) of the Income Tax Act, 1961. The High Court of Uttarakhand at Nainital decided to remand all 27 appeals to the ITAT for a fresh decision, following a precedent set by a previous judgment which had similar circumstances and issues.

• Counselvise Citation: [2009] 140 COUNSELVISE.COM (IT) 808722 (HC-UTTARAKHAND)
• Appeal Type: Others
• Pronouncement Date: 11-09-2009
• Assessment Year: misc
• Other Referred Cases: Western Geco International Ltd. Vs. Assistant Commissioner of Income Tax Dehradun
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: ARVIND VASHIST
• Assessee Lawyers: CHETAN JOSHI
• Keywords: Assessment year 2003-04; Income Tax; Monetary Payment; Multi stage grossing up; Perquisite; Tax Exemption
• Section: 143(1); 10(10CC); 260-A

Judgement Text

"IN THE HIGH COURT OF UTTARAKHAND AT NAINITAL Income Tax Appeal No. 212 of 2007 M/s Western Geco International Ltd. as Agent of Villarta Vicente, The Capital Court, 4th Floor, LSC Phase-III, Olof Palme Marg, Munirka, New Delhi. … Appellant Vs Assistant Commissioner of Income Tax Dehradun. … Respondent ALONG WITH (1) Income Tax Appeal No. 215 of 2007 M/s Western Geco International Ltd. … Appellant Vs Assistant Commissioner of Income Tax … Respondent (2) Income Tax Appeal No. 217 of 2007 M/s Western Geco International Ltd. … Appellant Vs Assistant Commissioner of Income Tax … Respondent (3) Income Tax Appeal No. 225 of 2007 M/s Western Geco International Ltd. … Appellant Vs Assistant Commissioner of Income Tax … Respondent 2 (4) Income Tax Appeal No. 226 of 2007 M/s Western Geco International Ltd. … Appellant Vs Assistant Commissioner of Income Tax … Respondent (5) Income Tax Appeal No. 228 of 2007 M/s Western Geco International Ltd. … Appellant Vs Assistant Commissioner of Income Tax … Respondent (6) Income Tax Appeal No. 231 of 2007 M/s Western Geco International Ltd. … Appellant Vs Assistant Commissioner of Income Tax … Respondent (7) Income Tax Appeal No. 232 of 2007 M/s Western Geco International Ltd. … Appellant Vs Assistant Commissioner of Income Tax … Respondent (8)Income Tax Appeal No. 234 of 2007 M/s Western Geco International Ltd. … Appellant Vs Assistant Commissioner of Income Tax … Respondent 3 (9) Income Tax Appeal No. 236 of 2007 M/s Western Geco International Ltd. … Appellant Vs Assistant Commissioner of Income Tax … Respondent (10) Income Tax Appeal No. 237 of 2007 M/s Western Geco International Ltd. … Appellant Vs Assistant Commissioner of Income Tax … Respondent (11) Income Tax Appeal No. 240 of 2007 M/s Western Geco International Ltd. … Appellant Vs Assistant Commissioner of Income Tax … Respondent (12) Income Tax Appeal No. 241 of 2007 M/s Western Geco International Ltd. … Appellant Vs Assistant Commissioner of Income Tax … Respondent (13) Income Tax Appeal No. 242 of 2007 M/s Western Geco International Ltd. … Appellant Vs Assistant Commissioner of Income Tax … Respondent (14) Income Tax Appeal No. 244 of 2007 M/s Western Geco International Ltd. … Appellant Vs 4 Assistant Commissioner of Income Tax … Respondent (15) Income Tax Appeal No. 247 of 2007 M/s Western Geco International Ltd. … Appellant Vs Assistant Commissioner of Income Tax … Respondent (16) Income Tax Appeal No. 250 of 2007 M/s Western Geco International Ltd. … Appellant Vs Assistant Commissioner of Income Tax … Respondent (17) Income Tax Appeal No. 251 of 2007 M/s Western Geco International Ltd. … Appellant Vs Assistant Commissioner of Income Tax … Respondent (18) Income Tax Appeal No. 252 of 2007 M/s Western Geco International Ltd. … Appellant Vs Assistant Commissioner of Income Tax … Respondent (19) Income Tax Appeal No. 253 of 2007 M/s Western Geco International Ltd. … Appellant Vs Assistant Commissioner of Income Tax … Respondent 5 (20) Income Tax Appeal No. 257 of 2007 M/s Western Geco International Ltd. … Appellant Vs Assistant Commissioner of Income Tax … Respondent (21) Income Tax Appeal No. 270 of 2007 M/s Western Geco International Ltd. … Appellant Vs Assistant Commissioner of Income Tax … Respondent (22) Income Tax Appeal No. 272 of 2007 M/s Western Geco International Ltd. … Appellant Vs Assistant Commissioner of Income Tax … Respondent (23) Income Tax Appeal No. 274 of 2007 M/s Western Geco International Ltd. … Appellant Vs Assistant Commissioner of Income Tax … Respondent (24) Income Tax Appeal No. 276 of 2007 M/s Western Geco International Ltd. … Appellant Vs Assistant Commissioner of Income Tax … Respondent (25) Income Tax Appeal No. 277 of 2007 M/s Western Geco International Ltd. … Appellant 6 Vs Assistant Commissioner of Income Tax … Respondent AND (26) Income Tax Appeal No. 279 of 2007 M/s Western Geco International Ltd. … Appellant Vs Assistant Commissioner of Income Tax … Respondent Sri Chetan Joshi, learned counsel for the appellant. Sri Arvind Vashist, learned Standing Counsel for the Income Tax/respondent. Date September 11, 2009 Hon’ble B.C. Kandpal, ACJ. Hon’ble B.S. Verma, J. Since all these 27 appeals, preferred under Section 260-A of the Income Tax Act, 1961 (for short the Act) are directed against the order dated 8-6-2007 passed by the Income Tax Appellate Tribunal (Delhi Bench ‘C’) (for short ITAT), in ITA Nos. 3120 to 3195/Del/2006 and as the controversy to be resolved in these appeals is the same and between the same parties as well as relating to the same Assessment Year 2003-04, therefore, for the sake of convenience, they are being decided by this common order. 2. By the order impugned in these appeals, the learned ITAT has upheld the order passed by the Commissioner of Income Tax (Appeals) (for short CITA) observing that there is no infirmity in the order of the CITA observing that the tax paid 7 by the employer is a perquisite provided for by way of monetary payment and the provisions of Section 10(10CC) of the Act are not applicable. 3. We have heard learned counsel for the parties and perused the record including the order impugned passed by the ITAT. 4. The following two questions of law have been framed to be answered in these appeals:- 1. Whether the Income Tax Appellate Tribunal, erred in law in holding that the tax paid by the appellant/assessee, an employer, on the salaries paid to its employees, is not exempted under Section 10(10CC) of the Income Tax Act, 1961? 2. Whether, the assessee/appellant is not liable to pay tax on the principle of ‘multi stage grossing up’? 5. Relevant facts of the case are that assessees are employees of Western Geco International Ltd., which filed returns of income on behalf of the employees for the assessment year 2003-04. The same were processed under Section 143(1) of the Act. The Assessing Officer (for short A.O.) noticed that no perquisite was included in the income and exemption was claimed under Section 10(10CC) of the Act. The A.O. after affording opportunity of hearing to the parties, did not find favour with the assessees and accordingly did not allow the exemption as claimed by them. The A.O. after applying the principle of ‘multiple stage grossing up’ assessed the income as mentioned in the assessment order. Aggrieved, the assessees preferred appeals before the Commissioner of 8 Income Tax (Appeals) [for short CITA]. The CITA, by its order dated 21-07-2006 partly allowed the appeals. Again aggrieved by that order, the assessees preferred the appeals before the ITAT, which were dismissed by the order impugned dated 8-6- 2007 in these appeals. 6. Learned counsel for the assessee/appellant has submitted at the outset that the Division Bench of this Court by its order dated 24-7-2009 has already set aside the impugned order dated 8-6-2007 passed by the ITAT New Delhi Bench ‘C’ in ITA Nos. 3120 to 3195/Del/2006 (Assessment Year 2003-04) and the matter has been remanded for reconsideration by the ITAT in the light of the subsequent development as mentioned in the said order whereby as many as 28 appeals, arising out of the same judgment impugned in the present appeals, have been disposed of by a common order. Learned counsel for the appellant has further submitted that the present appeals before this Court have also been included in ITA Nos. 3120 to 3195/Del/2006. In such circumstances when the order impugned has already been set aside and the matter has been remanded to the ITAT, these appeals be also disposed of in terms of order dated 24-7-2009 passed in Income Tax Appeal No. 206 of 2007 Western Geco International Ltd. Vs. Assistant Commissioner of Income Tax Dehradun along with 27 other appeals. Learned counsel for the appellant further submitted that this Court in terms of the said order dated 24-7-2009 has also decided a bunch of as many as 13 appeals preferred by the appellant by common order dated 7-8-2009. 7. Learned counsel appearing on behalf of the revenue/Income Tax, Sri Arvind Vashist, has fairly conceded to the above fact. 9 8. Since the order impugned dated 8-6-2007 passed by the ITAT stood already set aside and the matter has been remanded to the ITAT for reconsideration, therefore, we do not find it necessary to record the same finding again. All these appeals are also liable to be remanded to the ITAT for decision afresh and all the appeals are also liable to be disposed of in terms of order dated 24-7-2009 passed in Income Tax Appeal No. 206 of 2007 Western Geco International Ltd. Vs. Assistant Commissioner of Income Tax Dehradun along with Income Tax Appeals No. 208 of 2007, 209 of 2007, 210 of 2007, 211 of 2007, 214 of 2007, 219 of 2007, 224 of 2007, 227 of 2007, 229 of 2007, 230 of 2007, 238 of 2007, 246 of 2007, 248 of 2007, 249 of 2007, 254 of 2007, 255 of 2007, 256 of 2007, 259 of 2007, 260 of 2007, 263 of 2007, 264 of 2007, 265 of 2007, 266 of 2007, 267 of 2007, 268 of 2007, 271 of 2007 and 273 of 2007. Admittedly, the controversy involved in the present appeals is squarely covered by the said order. 9. All these 27 appeals are disposed of in terms of the order dated 24-7-2009 passed by the Division Bench of this Court in Income Tax Appeal No. 206 of 2007, Western Geco International Ltd. Vs. Assistant Commissioner of Income Tax Dehradun along with 27 abovementioned appeals. In view of the above judgment dated 24-7-2009, these matters are also remanded for reconsideration by the I.T.A.T. The impugned order dated 8-6-2007 also stands set aside. (B.S.Verma, J.) (B.C.Kandpal, ACJ.) RCP 10 11 "