Income Tax Appellate Tribunal - Delhi
Sharp Business Systems (India) Pvt. ... vs Assessment Unit, Jurisdictional ... on 13 September, 2024
IN THE INCOME TAX APPELLATE TRIBUNAL,
DELHI BENCH: 'I' NEW DELHI
BEFORE SHRI SAKTIJIT DEY, VICE-PRESIDENT
AND
SHRI M. BALAGANESH, ACCOUNTANT MEMBER
S.A. No.349/Del/2024
[Arising out of ITA No.3889/Del/2024]
Assessment Year: 2020-21
Sharp Business Systems Vs. Assessment Unit,
(India) Pvt. Ltd., Jurisdictional Assessing
1st Floor, Plot No. 51, Okhla Officer/Deputy
Industrial Area-Phase III, Commissioner of Income Tax,
New Delhi Circle-22(2), Delhi
PAN :AAECS2980A
(Appellant) (Respondent)
Assessee by Shri Raghvendra Prabhakar, CA
Respondent by Shri Sandeep Kr. Mishra, Sr. DR
Date of hearing 13.09.2024
Date of pronouncement 13.09.2024
ORDER
PER SAKTIJIT DEY, V.P.:
Captioned application has been filed by the assessee seeking stay on recovery of outstanding demand amounting to Rs.2,28,70,291/- for the assessment year 2020-21.
2. Learned counsel appearing for the assessee submitted that the demand arises out of the addition made on account of transfer pricing adjustment made to the Arm's Length Price (ALP) of the S.A. No.349/Del/2024 international transactions with the overseas Associated Enterprises (AEs). He submitted, the assessee operates in two segments, viz., Document and AV segment and Air Purifier Segment. He submitted, rejecting the transfer pricing analysis of the assessee, the Assessing Officer made adjustments to the ALP by making adjustment on substantive basis following intensity based Transactional Net Margine Method (TNMM). Whereas, he made adjustment on protective basis by applying Bright Line Test (BLT). He submitted, while disposing of the objections of the assessee, the Dispute Resolution Panel (DRP) directed the Assessing Officer to retain the substantive adjustment alone. However, in the final assessment order, the Assessing Officer has again retained both the additions i.e. adjustment made on substantive basis as well as addition made on protective basis. Thus, he submitted, the final assessment order is not in accordance with the directions of learned DRP. He further submitted, even otherwise also, the adjustments made are unsustainable. Therefore, he requested for stay on recovery of outstanding demand till the disposal of the appeal.
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3. Learned Departmental Representative strongly opposing grant of stay submitted, the assessee has failed to make out a strong prima facie case in its favour to justify stay of demand.
4. We have considered rival submissions and perused the materials on record. As discussed earlier, the demand in question was raised on account of transfer pricing adjustment made to the ALP declared by the assessee in respect of certain international transactions with the overseas AE. At this stage, we are not required to go into the merits of the issues leading to the transfer pricing adjustment as they are required to be examined in detail at the time of hearing of the appeal. However, as discussed earlier, the Transfer Pricing Officer (TPO) has made adjustments both on substantive as well as on protective basis. While disposing of the objections of the assessee, learned DRP had issued a direction to the Assessing Officer to stick with the substantive adjustment. However, learned DRP has further directed that in the event of substantive adjustment, being deleted by higher appellate authority, the Assessing Officer can convert the protective addition to substantive basis. It is common knowledge demand against protective addition cannot be enforced.
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5. Having analyzed the submissions of the assessee, in the context of facts and materials on record, we are of the view that the assessee has not made out a strong prima facie case for stay. Even, the assessee has not demonstrated before us that its present financial condition does not permit payment of the demand. Therefore, the balance of convenience is not in favour of the assessee. The assessee has also failed to demonstrate that non- grant of stay would result in irreparable injury and loss.
6. In the aforesaid factual backdrop, we do not find any good ground to stay recovery of outstanding demand. In view of the aforesaid, the present application filed by the assessee, being devoid of merit, is dismissed.
7. In the result, stay application is dismissed.
Order pronounced in the open court on 13th September, 2024 Sd/- Sd/-
(M. BALAGANESH) (SAKTIJIT DEY)
ACCOUNTANT MEMBER VICE-PRESIDENT
Dated: 13th September, 2024.
RK/-
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(A)
5. DR
Asst. Registrar, ITAT, New Delhi
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