2019 (11) TMI 456 - AT - Income Tax

Stay of demand - HELD THAT - AR has tried to argue the case on merits but, we would not like state that we are not going into merits at this stage and stay petitions are being decided on the basis of prima-facie case made out by the Ld. AR. We note that the bank accounts of the assessee stood attached by the department. The assessee has also deposited ₹ 25 Lacs against the outstanding demand of AY 2014-15 after passing the assessment order. Since the project of the assesse is substantially incomplete and bank accounts of the assessee are attached, the balance of convenience also weighs in favour of the assessee . We therefore, consider it the reasonable and proper to grant stay to the assessee subject to the condition that assessee would deposit a sum of ₹ 25 Lacs on or before 25/05/2019 against the outstanding demand of AY 2014-15 and the case of the assessee is also fixed for hearing on out of turn basis on 03/06/2019. The assessee is directed not to take adjournment without any reasonable cause failing which the stay would be subject to review by the bench hearing the case. The issue of notice is dispensed with as both the parties are informed in the open court.

Summary

Issues: Stay of outstanding demands for AY 2014-15 and 2015-16.

Analysis:
The assessee sought a stay of outstanding demands for two assessment years, 2014-15 and 2015-16, amounting to ?2,46,34,402 and ?97,95,814 respectively. The demands were based on additions made due to on money, discovered during a survey conducted under section 133A. The assessee, engaged in construction business, argued that the additions should be made upon project completion, following the project completion method. The department had attached the assessee's bank accounts, and the assessee had deposited ?25 lakhs against the demand for AY 2014-15. The AR requested a stay without out of turn hearing to prevent irreparable loss to the project. The DR opposed, suggesting a 50% deposit precondition for a stay.

After considering the arguments, the tribunal noted the incomplete status of the assessee's construction project and the basis for the additions from the survey. The tribunal refrained from delving into the merits at this stage and decided the stay petitions based on a prima facie case. Given the incomplete project and the attachment of bank accounts, the tribunal found it reasonable to grant a stay. The assessee was directed to deposit ?25 lakhs against the AY 2014-15 demand by a specified date and the case was scheduled for an out of turn hearing. The assessee was cautioned against unnecessary adjournments, failing which the stay would be reviewed. The issuance of notice was waived as both parties were informed in court.

In conclusion, the tribunal allowed the Stay Applications of the assessee, subject to the specified conditions, to address the outstanding demands for the mentioned assessment years.