Income Tax Appellate Tribunal - Delhi
Canon India Private Limited, Gurugram vs Dcit (Tp)-1(2)(1), New Delhi on 25 February, 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, HON'BLE PRESIDENT &
SHRI SAKTIJIT DEY, JUDICIAL MEMBER
Stay Application No. 64/Del/2022
Arising out of ITA No. 336/Del/2022
Assessment Year: 2010-11
Canon India Private Ltd., Vs. DCIT (TP)-,
7th Floor, Building No.5, Circle-1(2)(1),
Tower-B, DLF Cyber City, New Delhi
DLF Phase-3, Gurgaon,
Haryana, 122002
PAN :AAACC4175D
(Applicant) (Respondent)
Applicant by S/Shri Himanshu S. Sinha &
Bhuwan Dhoopar, Advocates
Respondent by Shri Umesh Takyar, Sr. DR
Date of hearing 25.02.2022
Date of pronouncement 25.02.2022
ORDER
PER SAKTIJIT DEY, JM:
Captioned application has been filed by the assessee seeking stay on recovery of outstanding demand amounting to Rs.1,46,00,186 pertaining to assessment year 2010-11.
2. Shri Himanshu S. Sinha, learned counsel for the assessee submitted, in the second round of proceedings after the matter was set aside by the Tribunal, the Transfer Pricing Officer has proposed nil adjustment on substantive basis and adjustment of 2 SA No. 64/Del./2022 Rs.710,547,313 on protective basis. He submitted, the aforesaid adjustment was made by the TPO while determining the arm's length price of advertisement, marketing and promotion (AMP) expenses alleged to have been incurred by the assessee, that too, by applying Bright Line Test (BLT) method. He submitted, that apart, while framing the draft assessment order, the Assessing Officer completely ignored assessee's claim of deduction under Section 80G of the Income-tax Act, 1961 for an amount of Rs.3,97,500 and claim of set off of brought forward loss pertaining to assessment year 2003-04 and current year's loss aggregating to Rs.19,32,08,420. He submitted, the same error of none grant of set off of loss and deduction claimed under Section 80G of the Act was perpetuated by learned DRP and in the final assessment order. He submitted, the assessee has filed rectification applications under Section 154 of the Act for assessment years 2003-04 and 2004-05 on 12.05.2021 and 07.02.2021 respectively, before the Assessing Officer, which are still pending. He submitted, the present demand does not arise out of any substantive addition but due to non-grant of set off of loss and deduction claimed under Section 80G of the Act. Thus, he submitted, since the assessee has strong prima facie case, the 3 SA No. 64/Del./2022 entire amount of outstanding demand should be stayed and an early hearing of appeal may be granted.
3. Learned Departmental Representative though opposed grant of stay, however, he agreed for early hearing of the appeal.
4. We have considered rival submissions and perused the material available on record.
5. Undisputedly, the only addition made by the Assessing Officer in the Assessment Order is relating to transfer pricing adjustment made on account of AMP expenses. However, this addition is on protective basis. Thus, admittedly no demand against such protective addition is enforceable. It is further noticed that the present demand is as a result of non-grant of set off of brought forward loss pertaining to assessment year 2003-04 and the current year's loss as well as disallowance of claim of deduction under Section 80G of the Act. The departmental authorities have not at all considered the issues relating to claim of loss and deduction under Section 80G of the Act, for which, the assessee has filed rectification application before the Assessing Officer, which is still pending. Thus, it is apparent from the facts on record, the impugned demand is not on account of any addition/disallowance but due to non-grant of certain deductions claimed by the assessee, which were never considered by the 4 SA No. 64/Del./2022 departmental authorities. Thus, upon due consideration of facts and material on record, we are convinced that the assessee has not only made out a strong prima facie case in its favour, but, the balance of convenience also lies in favour of the assessee.
6. In view of the aforesaid factual position, we are inclined to grant stay on recovery of outstanding demand for a period of six months from the date of this order or till disposal of assessee's corresponding appeal. With the consent of both the parties, an early hearing of appeal is granted and the appeal is fixed for hearing on 27.04.2022. Paper book, if any, must be filed by the parties sufficiently ahead of the date of hearing of the appeal, in accordance with the rules. We make it clear, the assessee should not seek any unnecessary adjournment which may entail vacation of stay. Considering the fact that assessee's rectification applications for assessment years 2003-04 and 2004-05 are pending for quite long, the Assessing Officer is directed to dispose of them expeditiously.
7. In the result, the stay application is allowed.
Order pronounced in the open court on 25th February, 2022.
Sd/- Sd/-
( G.S. PANNU ) (SAKTIJIT DEY)
PRESIDENT JUDICIAL MEMBER
Dated: 25th February, 2022.
Mohan Lal
5
SA No. 64/Del./2022
Copy forwarded to:
1. Applicant
2. Respondent
3. CIT
4. CIT(A)
5. DR
Asst. Registrar, ITAT, New Delhi
Sl. No. Particulars Date
1. Date of dictation: 25.02.2022
2. Date on which the draft of order is placed before the 25.02.2022 Dictating Member:
3. Date on which the draft of order is placed before the other Member:
4. Date on which the approved draft of order comes to the Sr. PS/PS:
5. Date of which the fair order is placed before the 25.02.2022 Dictating Member for pronouncement:
6. Date on which the final order received after having been singed/pronounced by the Members:
7. Date on which the final order is uploaded on the website of ITAT:
8. Date on which the file goes to the Bench 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: