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Judgement Last Updated on: 24 Jul 2009 LexDoc Id: 368490

Category - Direct Tax
Issuing Authority/Forum: HC (Uttarakhand)
Western Geco International Ltd. vs ACIT
Citation 188 Taxman 30

High Court of Uttarakhand

Western Geco International Ltd. vs ACIT

Income Tax Appeal No. 206 of 2007 along with ITA Nos. 208 - 211, 214, 219, 224, 227, 229, 230, 238,
246, 248, 249, 254 -256, 259, 260, 263 - 268, 271 and 273 of 2007

Prafulla C. Pant and B.S. Verma, JJ

24 July 2009

N. Venkatraman, Sr. Adv. assisted by Chetan Joshi, Adv. for the Appellant
Arvind Vashistha and Monica Pant, Advs. for the Respondent


Prafulla C. Pant, J:-

1. These appeals, preferred under Section 260 A of Income Tax Act, 1961, are directed against the order
dated 08.06.2007, passed in ITA Nos. 3120 to 3195/Del/2006 (Assessment Year 2003-04), by Income
Tax Appellate Tribunal (for short ITAT), New Delhi Bench 'C', whereby the appeals of the assessee, have
been dismissed.

2. Heard learned counsel for the parties.

3. The questions of law raised in these appeals are as under:-

1) Whether the Income Tax Appellate Tribunal erred in law in holding that the
appellant/assessee, an employer, who paid Income Tax on the salaries of its employees, is not
exempted under Section 10 (10 CC) of Income Tax Act, 1961?

2) Whether the Income Tax Appellate Tribunal has erred in law in holding that the income tax
payable by the appellant on the principle of multiple stage grossing up?

3. Brief facts of the case are that assessees are employees of Western Geco International Ltd., who filed
a return of income on behalf of the employees for the assessment year 2003-04. Return was processed
under Section 143 (1) of Income Tax Act, 1961. The Assessing Officer (for short A.O.) noticed that no
perquisite was included in the income and exemption was claimed under Section 10 (10 CC) of the Act.
After giving opportunity to the parties, the A.O. did not allow the exemption on the perquisite claimed by
the assessee, and after applying principle of 'multiple stage grossing up', the income was assessed at Rs.
13,40,010/-. Aggrieved by said order, the assessees filed the appeals before Commissioner of Income
Tax Appeals [for short CIT(A)]. Said authority, vide its order dated 21.07.2006, partly allowed the appeals,
whereafter the appeals were preferred by the assessees before ITAT, which were dismissed, vide

has vide its order dated 30. was not a perquisite in the nature of monetary perquisite to its employees.lexsite. and as such assessees are entitled to exemption under Section 10 (10CC) of the Act. shall not be included. not provided for by way of monetary payment.06. within the meaning of clause (2) of Section 17. Accordingly. The said view taken by the larger bench is contrary to the view taken by the Division Bench of the tribunal in the impugned order. passed by ITAT New Delhi Bench 'C' in ITA Nos. With the above direction. provides that in computing total income.impugned order dated . 6. 4. without expressing any opinion as to the final merits of the case. the impugned order dated 08. Clause (10CC) of Section 10 of the Income Tax Act. 3120 to 3195/Del/2006 (Assessment Year 2003-04). these appeals are disposed of. 1956). being an individual deriving income in the nature of a perquisite.11. 5. 1810/Del 2006 (Assessment Year 2004-05) along with 172 other appeals.2007. This document has been sourced from LexSite. in the case of an employee. 1961. has considered the issue relating as to whether the tax paid by the employer on the income of the assessee is entitled to exemption under Section 10 (10CC) of the Act. (notwithstanding anything contained in Section 200 of Companies Act. as mentioned above. stands set In the circumstances.2007. The larger bench of ITAT has taken the view that the tax paid by the employer on behalf of the employees. passed in ITA No. Visit us at http://www. we think it just and proper to remand back the matter for reconsideration by the ITAT in the light of the subsequent development.06. the tax on such income actually paid by his employer on behalf of such employee. Learned counsel for the appellants drew attention of this Court to the fact that a larger bench of the same tribunal.