2019 (6) TMI 1402 - AT - Income Tax

Stay on demand - Assessment Year 2009-10 - addition of Arms Length Price adjustment of payment of commission to Associated Enterprises - HELD THAT - The issue whether Arms Length Price adjustment is justified or not, requires verification of various factual aspects. Therefore it cannot be said that assessee company is having prima facie case in its favour on merits. Further, assessee could not make out any case of financial hardship. It is not a fit case for stay of demand - Registry is directed to post the appeal for hearing on 17.07.2019 for which no separate notice of hearing is required to be dispatched.

Summary

Issues: Stay of demand for Assessment Year 2009-10 due to Arms Length Price adjustment of commission to Associated Enterprises.

Stay of Demand Issue:
The petitioner, an assessee, sought a stay of demand amounting to &8377; 109,75,510 for the Assessment Year 2009-10, resulting from an Arms Length Price adjustment of commission to Associated Enterprises. The adjustment was made by the Assessing Officer/TPO, contending that the commission payment lacked justification. The petitioner argued that this should not be a reason for the adjustment and requested the demand to be stayed. The Departmental Representative opposed the stay petition. The Tribunal observed that the justification of the Arms Length Price adjustment required verification of factual aspects, indicating no prima facie case in favor of the assessee on merits. Additionally, the Tribunal noted the absence of evidence of financial hardship. Consequently, the Tribunal held that it was not a suitable case for the stay of demand. However, the Tribunal granted the petitioner's request for an early hearing and directed the appeal to be heard without a separate notice on a specified date. Ultimately, the stay petition was disposed of accordingly, with the order pronounced in an open court in Chennai on June 21, 2019.