Income Tax Appellate Tribunal - Cochin
M/S.Suntech Business Solutions P. Ltd, ... vs The Dcit, Trivandrum on 24 March, 2017
SP 77/C/2016
IN THE INCOME TAX APPELLATE TRIBUNAL
COCHIN BENCH
KOCHI
BEFORE S/SHRI ABRAHAM P GEORGE, AM & GEORGE GEORGE K, JM
STAY PETITION no 77/Coch/2016
Arising out of
IT(TP)A no. 509/Coch/2016
(Asst Year 2012-13)
Sun Tec Business Solutions P Ltd Vs The Dy Commr of Income Tax
321 Nila , Technopark Campus Circle 2(1), Trivandrumi
Karayavattom
Trivandrum 695 581
( Applicant) (Respondent)
PAN No. AAICS8020K
Assessee By Sh Raghunath Sampath
Revenue By Sh A Dhanaraj, Sr.DR
Date of Hearing 24th March 2017
Date of pronouncement 24th March 2017
ORDER
PER ABRAHAM P GEORGE, AM:
The assessee, through this Stay Petition, is seeking stay of recovery of outstanding demand of Rs. 19,021,990/-. The total demand comprises of tax of Rs. 9,586,424/- and interest of Rs. 94,35,566/-
2 The ld AR of the assessee submitted that the assessee is engaged in the business of providing software solutions to its clients located across the globe. As per the ld AR, assessee had international transactions with its Associated Enterprises on which the TPO had made adjustment of Rs. 23,771,229/-. The ld AR submitted that the addition made pursuant to DRP directions were due to 1 SP 77/C/2016 imputation of interest on amount advanced by the assessee to its branches and subsidiaries abroad. Further, as per the ld AR, the total levy of tax for the impugned assessment year came to Rs. 84,685,760/- which comprised of tax of Rs. 69,579,468/- and interest Rs 94,35,566/-. As per the ld AR, the assessee had paid a substantial part of the demand, viz Rs. 6.56 crores out of this. As per the ld AR, for imputing interest, the TPO had wrongly applied SBI PLR rate, whereas at the best only LIBOR could have been applied. Further, according to the ld AR, if the demand was insisted upon, it would cause serious and irreparable damage to the assessee. Reliance was placed on the CBDT memorandum no.404/72/93-ITCC dated 29th Feb 2016.
3 Per contra, the ld DR submitted that balance of convenience was in favour of the revenue. Further, according to him, assessee could not demonstrate its difficulties to pay the demand of outstanding tax. . The ld DR, submitted that CBDT office memorandum no.404/72/93-ITCC dated 29th Feb 2016 applied only where the first appeal before CIT(A) was pending and not applicable in a proceedings before this Tribunal. Thus, it was submitted the assessee should be directed to pay the balance outstanding demand. 4 We have heard the rival submissions and perused the material on record. We find that out of the total demand of Rs. 84,685,760/- a substantial part has been paid by the assessee and the balance which is left is only Rs. 19,021,990/. Assessee had paid more than 75% of the total demand. Nevertheless, it is also 2 SP 77/C/2016 true that assessee could not convincingly demonstrate its financial difficulties in paying the balance outstanding. Coming to the applicability of the memorandum of the CBDT dated 29.2.2016 (supra), the appeal has not come through CIT(A) but came through DRP. Hence, technically, the appeal filed by the assessee before us is the first appeal, since the appeal is against an assessment order pursuant to DRP directions. In such condition, we cannot say that the CBDT memorandum dated 29.02.2016 (supra), has no applicability in this case before the Tribunal. Considering all the above facts and circumstances of the case, we are of the opinion that, if the assessee pays a further sum of Rs. 25 lakhs out of the total outstanding demand of Rs. 19,021,990 before 30.3.2017, balance of the demand shall remain stayed for a period of 6 months from the date of this order or till the date of disposal of the appeal, whichever period expires earlier. Accordingly, subject to the condition, that assessee effects a payment of Rs 25 lakhs on or before 30.3.2017, we stay the balance outstanding demand for a period of 6 months from the date of this order or till the date of disposal of the appeal, whichever period expires earlier. We also direct the assessee not to seek adjournment on the date fixed for hearing, failing which this stay order shall automatically stand vacated. Ordered accordingly.
6 Registry is directed to post the appeals for hearing in due course. 3
SP 77/C/2016 7 In the result, the Stay Petition filed by the assessee is partly allowed. Order pronounced in the open Court on this 24th day of March 2017.
Sd/- Sd/-
(GEORGE GEORGE K) (ABRAHAM P GEORGE)
Judicial Member Accountant Member
Cochin: Dated 24th March 2017
Raj*
Copy to:
1. Appellant -
2. Respondent -
3. CIT(A)
4. CIT,
5. DR
6. Guard File
By order
Assistant Registrar
ITAT, COCHIN
4