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TMI Blog2012 (11) TMI 837X X X X Extracts X X X X X X X X Extracts X X X X ..... ing in view the existence of a prima facie case, balance of convenience and hardship, there should be a stay of recovery of outstanding demand pending disposal of the appeal of the assessee by the Tribunal or for a period of six months from to-day whichever is earlier. - Stay granted. - SA. NO.07/MUM/2012 - - - Dated:- 13-1-2012 - SHRI G.E.VEERABHADRAPPA AND SHRI N.V.VASUDEVAN, JJ. Applicants by : Shri Porus Kaka Respondent by : Shri Shubhankar Das ORDER PER N.V.VASUDEVAN, J.M, This is an application for grant of stay of recovery of outstanding demand of Rs. 2,55,34,154/- filed by the assessee. The outstanding demand arise out of an order imposing penalty under section 271(1)(c) of the Income Tax Act, 1961 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion order. Thereafter discussions took place between MBPL, the assessee and MIB and eventually the existing relationship of the Assessee with Indya.com and MBPL was terminated. The assessee terminated loan agreement before the close of financial year and waived off the loan granted to MBPL together with interest accrued. In view of the termination of waiver of loan, MIB and MBPL decided mutually to withdraw the petitions filed before the Hon ble Bombay High Court, which was allowed. As the assessee was not in a position to repay the loan money received by it from Indya.com, after due deliberations Indya.com waived the entire loan outstanding with interest. The Assessing Officer noted that the loan of Rs.116.52 crores received by the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tribunal also upheld the order of the CIT(A) on this issue in ITA No. 1014/Mum/09 for AY 05-06. The Tribunal held that the assessee received loan of Rs.116.52 crores from Indya.com and gave loan of Rs.139.58 crores to MBPL. The assessee paid interest to Indya.com and also charged interest from MBPL. As per the agreement dated 31.3.2005 Indya.com waived the loan of the assessee-company. Similarly MBPL incurred huge losses and was not in a position to repay the advance given by the assessee. On 31.03.2005 the Minutes of the meeting of directors of the assessee-company approved the waiver of principal amount i.e. Rs.139.58 crores due from MBPL. The accrued interest was not waived. Rather this sum due from MBPL was diverted in favour of an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a colourable device which is not the basis on which additions were made in the assessment proceedings. Our attention was drawn to the fact that the CIT(A) has not spelt out as to what is the information that has been concealed by the assessee so as to warrant imposition of penalty. The ld. counsel for the assessee submitted that after making an adjustment towards refund due to the Assessee only a sum of Rs. 1,54,66,974/- would be the outstanding demand payable by the assessee in respect of the penalty, as per the following chart: Particulars Amount Amount Amount % Penalty demand for A.Y 2005-06 29,639,925 100% Less: Already adjusted against refund due ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refore, submitted by him that there was no prima facie case made out by the assessee. 7. We have considered the rival submissions. We are of the view that prima facie it appears that there was adequate disclosure of the facts in the notes to the return of income about the interest income of Rs. 8.10 crores receivable from MBPL and the Assessee s action in not having been considered as income by the assessee. As to whether the stand of the assessee was correct or not is not relevant in the context of penalty proceedings. We are, therefore, of the view that there is a prima facie case made out by the assessee. We are also of the view that the balance of convenience lies in favour of the assessee ,as the assessee has already wound up its bus ..... X X X X Extracts X X X X X X X X Extracts X X X X
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