2014 (6) TMI 809 - AT - Income Tax

Stay application Stay of outstanding demand Held that - The outstanding demand has arisen as a result of various additions made to the total income of the assessee which mainly include disallowance u/s 40(a)(i), difference in AIR reconciliation and TP adjustment - the assessee has a good prima facie arguable case - the balance of convenience clearly lies in favour of the assessee and it is a fit case to grant stay of outstanding demand subject to payment of Rs. 30 lacs by the assessee against the outstanding demand in order to make the recovery of original outstanding demand to the extent of 50% - Partial stay granted

Summary

Issues:
Stay of outstanding demand for A.Y. 2008-09.

Analysis:
The judgment pertains to a Stay Application filed by the assessee seeking a stay of the outstanding demand of Rs. 1,69,52,948 for the assessment year 2008-09. The outstanding demand arose due to various additions made to the total income of the assessee, including disallowance under section 40(a)(i), a difference in AIR reconciliation, and TP adjustment. The assessee disputed all these additions in the appeal before the Tribunal, claiming to have a good prima facie arguable case to succeed on merit. The original demand was Rs. 2.86 crores, but after adjustments, the balance outstanding demand reduced to Rs. 1.69 crores. The Departmental Representative strongly opposed the stay application but suggested that if granted, the assessee should deposit some amount considering its financial position.

Upon considering the arguments from both sides and evaluating the relevant aspects, the Tribunal found that the balance of convenience favored the assessee. The Tribunal deemed it a fit case to grant a stay of the outstanding demand, subject to the payment of Rs. 30 lacs by the assessee. This payment was to be made against the outstanding demand by a specified date. The Tribunal directed the assessee to deposit the amount to cover 50% of the original outstanding demand. The remaining outstanding demand was to be kept in abeyance for six months or until the disposal of the corresponding appeal by the Tribunal. Additionally, the Registry was instructed to prioritize the appeal for an expedited hearing.

In conclusion, the Stay Application filed by the assessee was allowed by the Tribunal under the specified conditions. The order was pronounced in the open court on 6th June 2014.