2015 (1) TMI 150 - AT - Income Tax

Stay of demand - Transfer pricing adjustment - Disallowance of deduction u/s 80IB and 80IC - Held that - Admittedly, out of the total demand of ₹ 45 crores raised in the assessment year, the AO has already adjusted the refund due to the assessee for A.Y. 2004-05 amounting to ₹ 13.26 crores, which is equivalent to 30% of the total demand raised for the assessment year. The case of the AR is that the various additions made by the AO/TPO are against the principles laid down by the Tribunal in other cases. Under these circumstances, we are of the view that the balance of convenience is in favour of granting partial stay to the assessee. Accordingly, we direct the assessee to pay a sum of ₹ 10 crores in two equal installments. The first instalment shall be paid on or before 31.10.2014 and the second installment shall be paid on or before 30.11.2014. Subject to the payment of the aforesaid amounts, the balance amount of outstanding demand is stayed for a period of six months or till the disposal of the appeal, whichever period expires earlier. - Decided partly in favour of assesse.

Summary

Issues: Stay application for outstanding demand of Rs. 31.75 crore for A.Y. 2009-10.

Analysis:
1. The assessee filed a stay application for the outstanding demand of Rs. 31.75 crore for A.Y. 2009-10. The AO had completed the assessment with additions amounting to Rs. 89 crores, including TP adjustments and disallowances under sections 80 IB and 80IC of the Act. The AO set off a refund due to the assessee for A.Y. 2004-05, resulting in the remaining demand. The assessee argued that the adjustments made were against established principles and sought absolute stay of collection. The DR contended that the assessee did not demonstrate financial difficulty and supported the adjustments made by the TPO. The tribunal observed that the AO had adjusted 30% of the total demand through the refund, and considering the circumstances, granted a partial stay directing the assessee to pay Rs. 10 crores in two installments, staying the balance amount for six months or till appeal disposal.

2. The tribunal found that the balance of convenience favored granting a partial stay to the assessee due to the disputed additions made by the AO/TPO. The assessee was directed to pay Rs. 10 crores in two installments to avail the stay on the outstanding demand. The tribunal scheduled the appeal for final hearing in January 2015, cautioning the assessee against seeking adjournment on the fixed date. The stay order was subject to the payment of the specified amounts, and failure to comply could lead to a review of the stay order by the Bench. The date of hearing was communicated in the open court, and no further notice would be sent to the parties, considering the present order as the notice of hearing.

3. The tribunal partly allowed the stay application, requiring the assessee to pay Rs. 10 crores in installments to secure the stay on the outstanding demand. The decision was made to ensure a fair balance between the interests of the assessee and the tax authorities, considering the disputed additions and financial implications involved in the case. The tribunal set clear guidelines for the payment schedule and the subsequent appeal hearing, emphasizing the importance of compliance with the directives to maintain the stay on the demand amount.