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Stay of outstanding demand related to assessment year 2000-01. Analysis: The assessee, a news agency, filed an application seeking stay of the outstanding demand of Rs. 6,62,69,659 related to the assessment year 2000-01. The demand arose due to disallowance of a deduction claimed for distribution fee paid to a UK company. The CIT(A) confirmed the disallowance, leading to the outstanding demand. The assessee approached the CIT-V seeking stay, offering to pay Rs. 1.5 crores against the demand and requesting the balance to be stayed till the appeal before the Tribunal is disposed of. The CIT-V directed payment of Rs. 1.5 crores and subsequent instalments, warning of coercive measures for non-compliance. The assessee approached the Tribunal seeking stay of the demand for various reasons. Firstly, it highlighted that a significant portion of the demand consisted of interest, with only 23% being the tax portion. Secondly, it argued against double taxation, as the UK company had already been taxed on the distribution fee. The assessee also contended that the application of section 92 was incorrect and had been misapplied. It emphasized its ability to pay taxes but argued that undue hardship would be caused if the demand was enforced despite having strong merits for the case. The Departmental Representative opposed the stay, citing principles laid down by the Delhi High Court and arguing that the assessee had no financial stringency to pay the taxes. The representative also contended that the assessee had complied with the CIT-V's directions and should not be allowed to approach the Tribunal for stay. However, the Tribunal considered the merits of the case, finding a prima facie case in favor of the assessee. It noted the interpretation of section 92 and the potential for double taxation, leading to a balance of convenience in favor of the assessee. The Tribunal also acknowledged the financial position of the assessee and the undue hardship that would result from enforcing the demand. Ultimately, the Tribunal granted stay of the outstanding demand till the appeal's disposal, subject to the assessee furnishing security to the AO's satisfaction. The appeal was scheduled for an early hearing, with notices issued to both parties. The Tribunal's decision was based on the assessment of the prima facie case, balance of convenience, financial position of the assessee, and the potential undue hardship that would be caused if the demand was enforced.
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