Income Tax Appellate Tribunal - Delhi
Genpact Services Llc, Gurgaon vs Acit, Circle-1(3)(1), International ... on 25 November, 2022
Author: G.S. Pannu
Bench: G.S. Pannu
IN THE INCOME TAX APPELLATE TRIBUNAL,
DELHI BENCH: 'D' NEW DELHI
BEFORE SHRI G.S. PANNU, HON'BLE PRESIDENT
AND
SHRI SAKTIJIT DEY, JUDICIAL MEMBER
S.A. Nos. 267 & 268/Del/2022
[Arising out of ITA Nos.1833 & 1834/Del/2022]
Assessment Years: 2017-18 & 2018-19
M/s. Genpact Services LLC, Vs. ACIT,
Plot No.22A and B, Circle-1(3)(1), Intl. Taxation,
Sector-18,Udyog Vihar, Delhi
Gurgaon
PAN :AACCG3353P
(Applicant) (Respondent)
Applicant by Sh. Vishal Kalra, Advocate
Ms. Reema Malik, Advocate
Respondent by Sh. Kanv Bali, Sr. DR
Date of hearing 25.11.2022
Date of pronouncement 25.11.2022
ORDER
PER SAKTIJIT DEY, JM:
Captioned applications have been filed by the assessee seeking stay on recovery of the following outstanding demands:
1. Assessment Year 2017-18 - Rs.4,05,04,2645/-
2. Assessment Year 2018-19 - Rs.17,41,06,410/-
2. As far as assessment year 2017-18 is concerned, learned counsel for the assessee submitted, in pursuance to reference S.A. No. 267 & 268/Del/2022 made by the Assessing Officer, the Transfer Pricing Officer (TPO has not drawn any adverse inference with regard to the international transactions with the Associated Enterprises (AE). Whereas, the Assessing Officer has assumed the role of TPO and made addition in respect of the transactions with the AE. He submitted, while doing so, the Assessing Officer has erroneously rejected the cost allocation methodology adopted by the assessee. Thus, he submitted, the addition based on which the demand has been raised would not survive, once the appeal is decided on merits.
3. Insofar as assessment year 2018-19 is concerned, learned counsel for the assessee submitted that the transfer pricing adjustment of Rs.1,48,30,634/- has to be deleted as some of the comparables selected by the TPO would not qualify as comparable as they do not satisfy the Related Party Transaction (RPT) filter applied by the TPO himself. As regards the other addition of Rs.12,05,65,142/- made by the Assessing Officer by applying salary expenses ratio as against the head count ratio applied by the assessee towards cost allocation for support services, learned counsel submitted, the Assessing Officer cannot assume the role of TPO to determine the arm's length price of the transaction. In
2|Page S.A. No. 267 & 268/Del/2022 this regard, he relied upon certain decisions of the Tribunal. Further, learned counsel submitted, though, in the intimation issued under section 143(1) of the Act as well as in the order passed giving effect to the order of the first appellate authority, the Assessing Officer has granted credit for TDS, advance tax and self-assessment tax. However, in the final assessment order the Assessing Officer has erroneously failed to give credit to the prepaid taxes amounting to Rs. 5,98,67,606/-, for which, the assessee has moved a rectification application before the Assessing Officer, which is still pending. He submitted, once effect is given to the prepaid taxes, the demand will substantially reduce. Thus, he submitted, the assessee is willing to pay sum of Rs.1.5 crores against the outstanding demand, subject to which, recovery of balance outstanding demand may be stayed. Further, he requested for fixing an early date of hearing of the appeals.
4. Learned Departmental Representative submitted, the assessee may be directed to pay 20% of the outstanding demand, which will remain after demand is revised in pursuance to the rectification application. However, he did not oppose assessee's request for early hearing of the appeals.
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5. We have considered rival submissions and perused the materials on record. The merit of the issues arising in the corresponding appeals can be considered and decided at the time of hearing of the appeals.
6. At this stage, we have to examine, whether the assessee has made out a case for grant of stay on recovery of outstanding demand. Having considered the submissions of the parties in the context of facts and materials on record, we are of the view that the assessee has made out a prima facie case for grant of conditional stay. Further, it is observed, the assessee has not been given credit for prepaid taxes amounting to Rs.5,98,67,606/-, for which assessee's rectification application filed before the Assessing Officer is still pending.
7. Considering the aforesaid factual position, we are inclined to grant conditional stay by directing the assessee to pay aggregate amount of Rs.2 crores towards the outstanding demand raised for the impugned assessment years. Subject to payment of such amount, recovery of the balance outstanding demand shall remain stayed for a period of 180 days from the date of this order or till the disposal of the corresponding appeals of the assessee, whichever is earlier. However, the assessee will make the
4|Page S.A. No. 267 & 268/Del/2022 aforesaid payment, as directed, within 15 days from the date of service of the order passed by the Assessing Officer disposing of the rectification application filed by the assessee for the assessment year 2018-19. The Assessing Officer is directed to dispose of the rectification application filed by the assessee within a period of 30 days from the date of this order.
8. Further, accepting assessee's prayer, we direct the Registry to fix the corresponding appeals for hearing on 23.02.2023, on an out of turn basis. Paper-books, if any, must be filed by the parties sufficiently ahead of the date of hearing of the appeals. Since, the date of hearing of the appeals was announced in the open court in presence of both the parties, there is no need for issuance of any separate notice hearing to the parties. It is made clear, in the event of any unnecessary adjournment being sought by the assessee in appellate proceeding, there is likelihood of vacation of this order.
9. In the result, stay application is partly allowed.
Order pronounced in the open court on 25th November, 2022 Sd/- Sd/-
(G.S. PANNU) (SAKTIJIT DEY)
PRESIDENT JUDICIAL MEMBER
Dated: 25th November, 2022.
RK/-
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S.A. No. 267 & 268/Del/2022
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(A)
5. DR
Asst. Registrar, ITAT, New Delhi
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