2017 (12) TMI 1536 - AT - Income Tax

Stay of demand - Held that - For granting stay to the present assessee, payment of 55% of disputed demand and in addition to that maintenance of 20% of disputed demand as balance in the bank account of the assessee is just & proper condition. We deem it appropriate to direct the assessee to deposit a further amount of ₹ 175 crores so as to make it 55% (500 crores approx) of the impugned total demand of ₹ 910.61 Crores in respect to all these four assessment years i.e. 2009-10 to 2012-13, on or before 15.12.2017. Direct the assessee to retain balance of another 20% in account No. 0037238007, maintained with CITI Bank, M.G.Road Branch, Bengaluru-560 001 which comes to ₹ 182 crores, during the pendency of these appeals before the Tribunal in addition to depositing further amount of ₹ 175 crores . In terms of conditions mentioned herein above, stay orders earlier granted are extended for a period of three months from the date of this order or till the date of disposal of the appeals, whichever is earlier subject to compliance of the above directions.

Summary

Issues:
Stay petitions seeking extension of stay for assessment years 2009-10 to 2012-13; Direction to Tribunal to dispose of appeals without influence from previous orders; Assessment of payments made by assessee; Legal implications of payments made; Applicability of Section 40(a)(i) of the Act; High Court directions regarding maintaining balance for pending appeals; Interpretation of judgments related to tax liability; Revenue's stance on additional conditions for stay; Tribunal's analysis of previous orders and High Court directives.

Analysis:
The stay petitions were filed by the assessee for the assessment years 2009-10 to 2012-13, requesting an extension of the stay previously granted by the Tribunal. The assessee had already paid a significant amount of the total demand for these years, totaling 36% of the outstanding demand. The Tribunal was directed by the jurisdictional High Court to dispose of certain appeals without being influenced by previous orders. The High Court also directed the assessee to retain a balance of 20% of the outstanding demand in a specified bank account pending appeal disposal.

The assessee cited a judgment regarding the consideration of tax liability for the entire disputed period. The revenue argued for imposing similar conditions as per a previous High Court directive and highlighted a Tribunal order stating that a payment made by the assessee was considered royalty. The Tribunal considered the relevant judgments and previous orders, noting that the conditions set by the High Court for maintaining a balance were applicable in this case as well.

After thorough analysis, the Tribunal directed the assessee to deposit an additional amount to reach 55% of the total demand and retain a further 20% in the designated bank account. The stay petitions were allowed with conditions, extending the stay for three months or until the appeal disposal, subject to compliance with the specified directions and previous conditions. The Tribunal's decision was based on the legal principles discussed, ensuring adherence to the High Court directives and previous judgments.