2018 (3) TMI 1808 - AT - Income Tax

Stay for recovery of outstanding amount - transfer pricing adjustment made by the Assessing Officer - HELD THAT - Dispute arises for consideration is relating to transaction of engineering design services and information technology support services. The assessee has purchased raw material and finished goods from the Associated Enterprise. This Tribunal is of the considered opinion that out of total demand of ₹ 9,55,56,640/-, the assessee has already paid ₹ 6,75,61,964/- and what remains is only ₹ 2,79,94,680/-. Now the assessee is willing to pay ₹ 60,00,000/-. Therefore, there is a prima facie case for grant of stay. Accordingly, the recovery of outstanding amount of ₹ 2,79,94,680/- is hereby stayed for a period of six months from today on the condition that the assessee shall deposit ₹ 60,00,000/- on or before 31-03-2018. If the assessee fails to deposit ₹ 60,00,000/- on or before 31-03-2018, the stay shall stand automatically vacated. The Registry is directed to post the appeal of the assessee for final disposal on 09-05-2018

Summary

Issues involved: Stay petition for recovery of outstanding tax amount for the assessment year 2013-14.

Analysis:

1. Issue: Stay petition for recovery of outstanding tax amount
- The assessee filed a Stay Petition seeking relief from the recovery of an outstanding amount of ?2,79,94,680 for the assessment year 2013-14.
- The counsel for the assessee stated that the tax portion amounts to ?1,56,11,128 and the interest is ?1,23,83,552. The primary issue under consideration was the transfer pricing adjustment made by the Assessing Officer.
- The Tribunal noted that the dispute pertained to transactions involving engineering design services and information technology support services, where the assessee had purchased raw material and finished goods from an Associated Enterprise.
- Out of the total demand of ?9,55,56,640, the assessee had already paid ?6,75,61,964, leaving a balance of ?2,79,94,680. The assessee offered to deposit ?60,00,000 towards the outstanding demand.
- Considering the facts and submissions, the Tribunal found a prima facie case for granting stay. Consequently, it ordered the stay of recovery of the outstanding amount for six months, subject to the condition that the assessee deposits ?60,00,000 by 31-03-2018.
- Failure to meet the deposit deadline would automatically vacate the stay. The appeal was scheduled for final disposal on 09-05-2018, and the order served as a notice for the hearing on that date.

2. Judgment:
- The Stay Petition filed by the assessee was allowed based on the above considerations and observations made by the Tribunal.

This detailed analysis outlines the key issues involved in the Stay Petition for recovery of outstanding tax amounts, the arguments presented by both parties, and the Tribunal's decision to grant a stay subject to specific conditions and timelines.