9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (3) TMI 211 - AT - Income TaxStay petition - Factor for granting stay - prima facie case - balance of convenience - disallowance of Expenditure for non deduction of TDS u/s 195 - payments were in the nature of Royalty and chargeable to tax in the hands of GIL in India - profits attributable to Google Ireland - income accrue in India - international Transactions - HELD THAT - After considering the existence of prima facie case, balance of convenience, relative hardship, the earlier orders of the Tribunal and the orders of the Hon ble High Court of Karnataka in the case of the Assessee on identical issue of grant of stay, the offer to pay by the Assessee and the demand of the department, we are of the view that it would be just and appropriate to grant an order of stay of recovery of outstanding demand for a period of 6 months from the date of this order, or till disposal of the appeals of the Assessee, whichever is earlier.
Issues Involved:
Stay petitions filed by Assessee for recovery of outstanding demand arising from assessment orders and first appellate authority decisions for AY 2014-15, 2016-17 & 2013-14; Disallowance of payments to Google Ireland Ltd. (GIL) as royalty; Determination of Arm’s Length Price (ALP) for international transactions; Attribution of profits to Google Ireland Ltd. (GIL). Analysis: Issue 1: Outstanding Demand and Royalty Disallowance The outstanding demand pertains to additions made by the Assessing Officer (AO) / Transfer Pricing Officer (TPO) confirmed by CIT(Appeals) and Disputes Resolution Panel (DRP). The demand in AY 2016-17 arose from failure to deduct tax at source on payments to GIL. The Assessee contended that the payments were not royalty under the Act or the India-Ireland DTAA. The authorities held the payments as royalty, disallowed the sums, and treated Assessee as Assessee in default under section 40(a)(ia) in AYs 2014-15 & 2013-14. The Assessee appealed against these orders. Issue 2: Arm’s Length Price Determination The second addition leading to the outstanding demand in AYs 2014-15 & 2013-14 involved determining the Arm’s Length Price (ALP) under section 92 for international transactions of IT and IT enabled services and Marketing and Distribution services by Assessee to Associated Enterprises (AE). Issue 3: Profits Attribution to Google Ireland Ltd. (GIL) The third addition causing the outstanding demand in AYs 2014-15 & 2013-14 was due to attributing profits to GIL. The AO found that profits from AdWords program attributable to GIL were untaxed. The issue had been previously adjudicated by ITAT and sent back to AO for reconsideration. The Tribunal considered the earlier orders, balance of convenience, and the Assessee's offer to pay. It granted a stay of recovery for 6 months or till disposal of appeals, whichever is earlier. The Assessee was directed to pay ?350 Crores by 31.3.2019 and ?125 Crores in installments for outstanding demand. The appeals were scheduled for an expedited hearing on 03.07.2019 without further notice to parties. In conclusion, the stay petitions were allowed, and the detailed payment schedule was provided for the outstanding demand across the assessment years.
|
