TaxTMI 
TaxTMI 
1999 (8) TMI 119
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....Act, 1961 (hereinafter called the Act). 3. We have heard the rival submissions in the light of material placed before us and precedents relied upon. Assessments in all these cases were completed by making recourse to the deeming provision as contained in section 44BB of the Act. The learned Departmental Representative vehemently argued that the tax paid by the employer is a perquisite, given to the employee. This is to be added in the salary of the employee like any other perquisite. 4. Our attention was invited on the provision of section 28(iv) of the Act, which stipulates that the value of any benefit or perquisite whether converted into money or not, arising from business or the exercise of profession, shall be chargeable to Incom....
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....2) of section 44BB of the Act the amounts referred to in subsection (1) shall be the amount paid or payable [whether in or out of India] to the assessee or to any person on his behalf on account of the provision of services and facilities in connection with or supply of plant and machinery on hire used or to be used in the prospecting for, or extraction or production of, mineral oil in India. 7. It was fairly conceded by the learned counsel for the assessee that the word 'paid or payable" includes tax portion also. Therefore, the payment of tax on behalf of the contractor, is part and parcel of the income and it should be grossed up on single stage basis and not on multi stage basis. 8. The learned counsel also relied on some preceden....
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....simplification, the Bill seeks to insert a new section 44BB in the Income-tax Act providing for determination of income of such taxpayers at ten per cent, of the aggregate of certain amounts. The amounts in respect of which the provisions will apply would be the amounts paid or payable to the taxpayer or to any person on his behalf whether in or out ofIndia, on account of the provision of such services or facilities or supplying plant and machinery for the aforesaid purposes. This amount will also include the amounts received or due to be received inIndiaon account of such services or facilities or supply of plant and machinery. The aforesaid amendment will not, however, apply to any income to which the provisions of sections 42, 44D, 115A ....
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....o in the foregoing provisions of this Chapter is to be borne by the person by whom the income is payable, then, for the purposes of deduction of tax under those provisions such income shall be increased to such amount as would, after deduction of tax thereon at the rates in force for the financial year in which such income is payable, be equal to the net amount payable under such agreement or arrangement." 13. Both the parties agreed that the section 195A has to be read along with section 195. It is true that section 195A is applicable in the case of the assessee. But it is applicable only for the purpose of determining the amount of tax deductible at source. its scope cannot be elongated any further. 14. There are two broad heads of ....
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....ng. Suppose, the income is hundred, and twenty per cent is the tax rate. [As per the decision of the Hon'ble Supreme Court in the case of Emil Webberv. CIT[1993] 200 ITR 483/67 Taxman 532 (SC), tax assessed on assessee, paid by Indian concern pursuant to an agreement with foreign concern, constitutes income of the assessee]. The income of the assessee will, therefore, be treated at Rs. 120. Tax payable on Rs. 120 will be Rs. 24. This is single stage grossing. The assessee agreed to that. 16. Now for multi stage grossing, four more rupees to be added to arrive at Rs. 24 the amount of tax. Tax on Rs. 124 work out to Rs. 24.8. Since only Rs. 24 was added additional Re. .8 is to be further added to the income. On Rs. 124.8 tax works out to R....