Income Tax Appellate Tribunal - Delhi
M/S. Bg International Ltd., Mumbai vs Dcit (International Taxation), ... on 9 June, 2017
1
SA.No.338/Del/2017 in ITA.No.3640/Del.2017
BG International Ltd., Mumbai.
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCHES ""A": DELHI
BEFORE SHRI G.D. AGARWAL, HON'BLE PRESIDENT
AND
SHRI BHAVNESH SAINI, JUDICIAL MEMBER
Stay Application No.338/Del/2017
Arising out of
ITA.No.3640/Del./2017 - Assessment Year 2012-2013
M/s. BG International Ltd., C/o.
Deloitte Haskins and Sells LL.P.
Indiabulls Finance Centre, Tower-3, vs. DCIT, International Taxation,
28th Floor, Elphinston Mill Compound, Dehradun.
Senapati Bapat Marg, Elphinstone (W),
Mumbai - 400013
PAN AACCB6571E
(Applicant) (Respondent)
For Applicant : Shri Ajay Vohra, Sr. Advocate &
Shri Anshul Sachar, Advocates
For Revenue : Shri S.K. Jain, Sr. D.R.
Date of Hearing : 09.06.2017
Date of Pronouncement : 09.06.2017
ORDER
PER BHAVNESH SAINI, J.M.
We have heard Ld. Counsel for the assessee and Ld. For Revenue and perused the material on record. This order shall dispose of the stay application filed by assessee for A.Y. 2012-2013.
2. The assessee seeks stay of recovery of the outstanding demand of Rs.160,79,52,270. Ld. Counsel for the assessee submitted that assessee filed return of income at NIL, however, the income assessed by the A.O. vide order dated 12th May, 2017 comes to Rs.241,96,17,158. He has submitted that the claim of the assessee had been that receipts by the assessee from BGEPIL are in the nature 2 SA.No.338/Del/2017 in ITA.No.3640/Del.2017 BG International Ltd., Mumbai.
of reimbursements not liable to tax in India. The transaction of reimbursement of expenses to the non-resident does not result in any income in the hands of recipient. Hence, such reimbursement is not chargeable to tax in India in the hands of the non-resident for want of any income element embedded therein. Without prejudice to the above contention, Ld. Counsel for the assessee submitted that payment received by the assessee from BGEPIL are taxable in terms of Section 44BB of the Act and not under section 44DA of the I.T. Act. He has submitted that the Tribunal in assessee's own case for the A.Y. 2007- 08 had held that the payment made by BGEPIL to the assessee were taxable in accordance with the provisions of Section 44BB of the Act. The aforecited decision has been followed by the Tribunal in assessee's own case for the A.Y. 2008-09 to 2010-2011 in ITA.No.470/Del/2013, 815/Del./2014 and ITA.No.107/Del.2015 dated 17th April, 2015, copy of which is filed at page 156 of the paper book in which the alternate contention of the assessee was accepted that above receipt should be taxed as per the provisions of Section 44BB of the Act. Ld. Counsel for the assessee submitted that as per the decision of the Tribunal in earlier year if the tax is to be calculated the same come to Rs.12,45,60,432, calculation of the same is filed which reads as under:
BG International Limited - Assessment Year 2012-2013 Without prejudice to the contention that payments received by the applicant are mere reimbursment of expenses, tax liability under section 44BB of the Act is computed as under:
Particulars Amount Income assessed by the assessing officer vide order 241,96,17,158 dated 12.05.2017 Profits deemed to be chargeable to tax under section 24,19,61,716 44BB of the Act @ 10%.
Income tax payable including surcharge and cess @ 42.024% 10,16,81,991 3 SA.No.338/Del/2017 in ITA.No.3640/Del.2017 BG International Ltd., Mumbai.
Interest under section 234D of the Act on the excess 2,28,78,443 refund granted to the applicant.
Total tax and interest payable 12,45,60,434
3. Ld. Counsel for the assessee submitted that assessee similarly filed stay application No.55/Del./2017 in ITA.No.245/Del.2017 for A.Y. 2011-2012 which is decided by the Tribunal vide order dated 10th February, 2017 and stay application has been allowed subject to deposit of Rs.10 crores. Copy of the order is filed. Ld. Counsel for the assessee submitted that assessee is willing to deposit Rs.10 crores in this assessment year as well. He has therefore, prayed that the demand may be stayed till the final disposal of the appeal and the assessee's appeal along with the appeal for A.Y. 2011-2012 in ITA.No.245/Del/2017 may be clubbed together and taken-up for hearing on an early date because the same also has an identical issue.
4. On the other hand, Ld. D.R. submitted that assessee may be directed to deposit atleast Rs.50 crore for seeking stay against the outstanding demand.
5. We have considered the rival contentions. Admittedly, in the present case, assessee filed return of income at NIL. However, the total income is determined at Rs.241,96,17,158 which is very high- pitched assessment. The issue involved in the present appeal has already been adjudicated upon by the Tribunal in earlier A.Ys. 2007- 08 to 2010-2011 (supra) as is argued by the Ld. Counsel for the assessee and if the ratio is applied in the present case, according to the Ld. Counsel for the assessee, the outstanding demand would be left to Rs.12,45,60,434. We, therefore, considering the history of the assessee and the issue involved in the present appeal, find that the assessee has a prima facie case for grant of stay against the recovery 4 SA.No.338/Del/2017 in ITA.No.3640/Del.2017 BG International Ltd., Mumbai.
of the outstanding demand for a period of six months or disposal of the appeal whichever happened earlier. The balance of convenience also lies in favour of the assessee. We, therefore, stay the recovery of the entire outstanding demand for a period of six months or disposal of the appeal whichever may expire earlier subject to the condition that assessee shall deposit Rs.12.50 crores with the Revenue Department on or before 30th June, 2017. Office is directed to fix the appeal of the assessee for hearing on 'out of turn basis' on 6th July, 2017. Office is also directed to fix the appeal of the assessee for A.Y. 2011-2012 in ITA.No.245/Del./2017 along with the present appeal on the same date i.e., on 6th July, 2017 for final disposal of the appeals. The assessee shall not seek unnecessary adjournment in the matter. No separate notice will be issued to the parties. Copy of the order be given to both the parties.
6. In the result, stay application of the assessee is allowed in terms indicated above.
Order pronounced in the open Court on 09.06.2017.
Sd/- Sd/- (G.D. AGARWAL) (BHAVNESH SAINI) PRESIDENT JUDICIAL MEMBER New Delhi, Dated 09th June, 2017 VBP/- Copy to 1. The applicant 2. The respondent 3. CIT(A) concerned 4. CIT concerned 5. D.R. ITAT Delhi A Bench, New Delhi 6. Guard File