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2014 (3) TMI 689 - AT - Income TaxApplication for extension Stay of outstanding demand Reduction of the claim of deduction u/s 10A of the Act Held that - Assessee relied upon CIT vs. Gem Plus Jewellery India Limited 2010 (6) TMI 65 - BOMBAY HIGH COURT the decision had not been brought to the notice of the tribunal earlier even when the decision was available - Prima facie balance of convenience goes in favour of the assessee - because the Hon ble High Court has upheld the assessee s claim of exemption u/s.10A, even on the disallowances of business expenses and the decision of the Jurisdictional High Court has not been considered by the Tribunal - several extensions of stay of outstanding demand have been granted to the assessee from time to time, primarily for the reason that assessee has deposited the entire tax amount and only part of the interest amount is outstanding and that the assessee has not been in default for not conducting the appeal before the tribunal thus, stay of the outstanding demand should be extended for further period of six months from the date of issuance of the order or passing of the order by the Tribunal in the appeal Decided in favour of Assessee.
Issues:
Stay extension of outstanding demand related to A.Y. 2007-08 in ITA No.157/M/2012. Analysis: 1. The primary issue in this case was the extension of stay for the outstanding demand of Rs.63,85,261/- related to the assessment year 2007-08. The main contention revolved around the reduction of the claim for deduction u/s.10A by the Assessing Officer, amounting to Rs.4,83,24,907/-. The Tribunal had initially granted stay until the appeal's disposal, which was extended multiple times due to the appeal's delay without fault of the assessee. 2. The background of the issue involved the assessee's claim for exemption u/s.10A of Rs.25,93,89,197/-, which included a suo moto disallowance of Rs.4,83,24,907/ for salary and expenses reimbursement. The Assessing Officer denied the deduction u/s.10A based on this disallowance, leading to the outstanding demand. The Tribunal had previously ruled against the assessee in a similar issue for A.Y. 2006-07. 3. The assessee argued that the issue was covered by a decision of the Jurisdictional High Court, allowing exemption under section 10A even for disallowed expenses. The Tribunal's decision was challenged in the High Court, with the hearing scheduled. The assessee contended that the disallowance would enhance profits eligible for exemption under section 10A. 4. The Senior DR opposed the stay extension, citing the Tribunal's previous decision against the assessee and the need for a strong prima facie case for granting stay. The decision of the Hon'ble Supreme Court and previous Tribunal rulings were referenced to support the opposition to the stay extension. 5. After considering the submissions, the Tribunal noted that the High Court's decision supporting the assessee had not been previously brought to its notice. The Tribunal found the balance of convenience favored the assessee, especially since the assessee had paid most of the tax amount and had not defaulted in the appeal process. Therefore, the Tribunal granted the extension of stay for the outstanding demand of Rs.63,85,261/- for a further period of six months. 6. In conclusion, the Stay Application filed by the assessee was allowed, emphasizing that both parties should be prepared for the appeal's next hearing date without seeking unnecessary adjournments. This detailed analysis covers the issues, arguments, and the Tribunal's decision regarding the extension of stay for the outstanding demand in the mentioned legal judgment.
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