COMMISSIONER OF INCOME TAX Vs. O N G C AGENT OF CGG FRANCE

JUDGEMENT

(1.) D.B. Income-tax Reference Application No. 15 of 1995 under Section 256(2) of the Income-tax Act, 1961, is directed against an order dated July 21, 1993, passed by the Income-tax Appellate Tribunal in R. A. Nos. 15, 16 and 17/JP of 1992 arising out of I. T. A. Nos. 420, 421 and 422/JP of 1988, for the assessment year 1985-86.

(2.) D. B. Income-tax Reference Application No. 19 of 1995 is also directed against the self-same order passed by the Income-tax Appellate Tribunal in R. A. Nos. 15, 16 and 17/JP of 1992 arising out of I. T. A. Nos. 420, 421 and 422/JP of 1988 for the assessment year 1984-85.

(3.) BEFORE the Commissioner of Income-tax, it was contended by the assessee that Section 44BB overrides the provisions of Section 28, under which the perquisite is required to be included in the profits and gains of business. Further, it was contended that the surtax is not payable by the Oil and Natural Gas Commission as representative assessee of the nonresident company. However, the Commissioner of Income-tax held that Section 44BB does not override the entire provisions of Section 28 and, therefore, besides income-tax, the Assessing Officer ought to have added the value of perquisite on account of surtax borne by the Oil and Natural Gas Commission on behalf of the foreign company. Further, relying on the Supreme Court decisions in Smt. Rampyari Devi Saraogi v. CIT [1968] 67 ITR 84 and Smt. Tara Devi Aggarwal v. CIT [1973] 88 ITR 323, the Commissioner of Income-tax held that the assessment orders were erroneous and prejudicial to the interest of the Revenue and set aside the assessments and directed them to be made afresh. While doing so, the Commissioner of Income-tax also mentioned that it should also be kept in view that while framing the fresh assessments, it was to be found out whether it was a case of single or multiple grossing up, even though this point was not specifically mentioned in the show-cause notice.