Income Tax Appellate Tribunal - Delhi
Whirlpool Of India Limited, Gurgaon vs Acit, Circle-10(1), Delhi on 7 November, 2022
Author: G.S. Pannu
Bench: G.S. Pannu
IN THE INCOME TAX APPELLATE TRIBUNAL,
DELHI BENCH: 'I' NEW DELHI
BEFORE SHRI G.S. PANNU, PRESIDENT AND
SHRI SAKTIJIT DEY, JUDICIAL MEMBER
Stay Application Nos. 348 & 349/Del/2022
(In ITA Nos.2051 & 2050/Del/2022)
Assessment Years: 2011-12 & 2018-19
Whirlpool of India Limited, Vs. ACIT/DCIT, Central Circle-
Plot No. 40, Whirlpool 10(1),
Houwse, Sector-44, Gurgaon New Delhi.
Haryana - 122002
PAN :AAACW1336L
(Appellant) (Respondent)
Assessee by S/Sh. Neeraj Jain, Adv. & Ramit
Katyal, CA
Respondent by Shri Abhishek Kumar, Sr. DR
Date of hearing 04.11.2022
Date of pronouncement 07.11.2022
ORDER
PER SAKTIJIT DEY, JUDICIAL MEMBER:
Captioned applications have been filed by the assessee seeking stay on recovery of following outstanding demands:
Assessment year 2011-12 Rs.217,11,23,293 Assessment year 2018-19 Rs.97,31,31,789 2 S.A.Nos.348 & 349/Del/2022
2. Learned counsel appearing for the assessee submitted, demand relating to additions made on account of transfer pricing adjustment of advertisement, marketing and promotion (AMP) expenses is not enforceable as the issue has been consistently decided in favour of the assessee by the Hon'ble jurisdictional High Curt and Tribunal in various assessment years in assessee's own case. Proceeding further, he submitted in assessment year 2011-12, the DRP itself deleted the adjustment while deciding assessee's objection. He submitted, against the decision of the DRP, the revenue came in appeal before the Tribunal which is still pending. However, he submitted, under a factual misconception and the Tribunal has restored the issue while deciding assessee's appeal for assessment years 2010-11, 2011-12 and 2012-13 to the Assessing Officer, the Transfer Pricing Officer (TPO) again repeated identical adjustment which has been confirmed by the DRP. Thus, he submitted, the entire adjustment has wrongly been made in assessment year 2011-12, hence demand relating to such adjustment has to be stayed. In so far as similar addition made in assessment year 2018-19, the issue is squarely covered in favour of the assessee by the decisions of the Tribunal and High Court and the 3 S.A.Nos.348 & 349/Del/2022 DRP has sustained the addition merely on the ground that identical issue is pending before the Hon'ble Supreme Court. Thus, he submitted, the demands relating to AMP adjustment cannot be enforced. As regards the demand pertaining to other additions, learned counsel submitted, the assessee is willing to deposit 20% of such demand, subject to which, recovery of the balance outstanding demand may be stayed. Further, learned counsel made a prayer for fixing an early date of hearing of the appeals.
3. The Learned Departmental Representative submitted, the assessee may be directed to pay 20% of the entire demand.
4. We have considered rival submissions and perused the material on record. The additions giving rise to the disputed demand in the aforesaid assessment years are as under:
Whirlpool of India Limited A.Y. 2011-12 S. Particulars Amount of Tax No. Disallowance/Additions Addition/disallowance A.Y.2011-12 A.Y. 2018-19 made by the assessing In Rupees In Rupees officer 1 Transfer Pricing 294,45,38,226 81,83,68,047 adjustment on account of AMP expenses 4 S.A.Nos.348 & 349/Del/2022 2 Disallowance of 4,091,279 NIL payment of hotel restaurant bills 3 Disallowance on 1,453,633 NIL account of undisclosed TDS 4 Disallowance on 1,547,260 NIL account of short deduction of TDS 5 Disallowance of 1,290,000 NIL provision for package tour 6 Disallowance of 219,633,264 168,958,871 deduction under section 35(2 AB) of the Act.
7 Disallowance NIL 10,165,216 u/s.41(1)(a) of the Act.
5. Though, at this stage, we are not required to examine the merits of the issues giving rise to the disputed demands, as, they have to be considered at the time of hearing of appeals, however, on perusing facts and material on record, we are convinced that the demands corresponding to the transfer price adjustment on account of AMP expenses cannot be enforced. This is so because, in assessment year 2011-12, the DRP has granted full relief to the assessee by deleting the entire adjustment, against which, the revenue has preferred an 5 S.A.Nos.348 & 349/Del/2022 appeal before the Tribunal, being ITA No. 2166/Del/2016, which is pending for disposal. Completely misconceiving the aforesaid factual position, the TPO has again made identical adjustment in the second round after some other issues raised by the assessee in its appeal were restored back to the file of the Assessing Officer for reconsideration.
6. Unfortunately, learned DRP without properly examining the facts, upheld the adjustment. Facts on record clearly reveal that in assessment year 2011-12, transfer pricing adjustment on AMP adjustment was never an issue in assessee's appeal. Thus, prima facie, the assessee has made out a strong case for stay on recovery of demand relating to transfer pricing adjustment on AMP expenses. In so far assessment year 2018-19 is concerned, in our view, the assessee has a equally strong prima facie case on merits in respect of transfer pricing adjustment on AMP expense. This is so because, not only the Hon'ble High Court but the Tribunal in assessee's own case in various other assessment years have consistently decided the issue in assessee's favour.
7. In view of the aforesaid, the demand pertaining to addition made on account of transfer pricing adjustment on AMP expenses is 6 S.A.Nos.348 & 349/Del/2022 unenforceable. Keeping in view the aforesaid factual position and the willingness of the assessee to pay 20% of the demand arising out of other additions/disallowances made in the assessment years under dispute, we direct as under:
1. The Assessing Officer is restrained from taking any coercive action for recovery of demand pertaining to transfer pricing adjustment on account of AMP expenses, in both the assessment years under dispute;
2. In so far demand relating to other additions made in both the assessment years under dispute, the assessee is directed to pay 20% of such demand on or before by 3rd of December 2022.
8. Subject to payment of the amount as directed hereinabove, recovery of the balance outstanding demand shall remain stayed for a period of 180 days from the date of this order or till disposal of the corresponding appeals of the assessee, whichever is earlier.
9. Further, accepting assessee's prayer, which was not opposed by learned Departmental Representative, we direct the Register to fix the corresponding appeal for hearing on 2nd of January 2023, on an out of turn basis.
10. 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 7 S.A.Nos.348 & 349/Del/2022 of appeals was announced in the open court in presence of both the parties, there is no need to issue separate notice of hearing to the parties.
11. It is made clear, in case, assessee seeks any unnecessary adjournment in the appeal proceedings, there is likelihood of this stay order being vacated.
12. In the result, these applications are partly allowed.
Order pronounced in the open court on 7th November, 2022.
Sd/- Sd/-
(G.S. PANNU ) (SAKTIJIT DEY)
PRESIDENT JUDICIAL MEMBER
Dated: 07th November, 2022.
Mohan Lal
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(A)
5. DR
Asst. Registrar, ITAT, New Delhi
8
S.A.Nos.348 & 349/Del/2022
Sl. Particulars Date
No.
1. Date of dictation (Order drafted through 04.11.2022 Dragon software):
2. Date on which the draft of order is placed 07.11.2022 before the Dictating Member:
3. Date on which the draft of order is placed 07.11.2022 before the other Member:
4. Date on which the approved draft of order 07.11.2022 comes to the Sr. PS/PS:
5. Date of which the fair order is placed before 07.11.2022 the Dictating Member for pronouncement:
6. Date on which the final order received after 10.11.2022 having been singed/pronounced by the Members:
7. Date on which the final order is uploaded on 10.11.2022 the website of ITAT:
8. Date on which the file goes to the Bench 10.11.2022 Clerk
9. Date on which files goes to the Head Clerk:
10. Date on which file goes to the Assistant Registrar for signature on the order:
11. Date of dispatch of order: