Income Tax Appellate Tribunal - Delhi
Bt Global Communications India Private ... vs Nfac, Delhi on 11 March, 2022
IN THE INCOME TAX APPELLATE TRIBUNAL,
DELHI BENCH: 'I-1' NEW DELHI
BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER
AND
SHRI SAKTIJIT DEY, JUDICIAL MEMBER
S.A. No.77/Del/2022
[Arising out of ITA No.350/Del/2022]
Assessment Year: 2017-18
BT Global Communications Vs. NFAC,
India Pvt. Ltd., Delhi
11th Floor, Eros Corporate
Tower, Opp. International
Trade Tower, Nehru Place,
Delhi
PAN :AAACG1534A
(Appellant) (Respondent)
Appellant by Sh. Deepak Chopra , Advocate
Sh. Ankul Goyal, Advocate
Respondent by Sh. Mrinal Kr. Das, Sr. DR
Date of hearing 11.03.2022
Date of pronouncement 11.03.2022
ORDER
PER SAKTIJIT DEY, JM:
Captioned application has been filed by the assessee seeking stay on recovery of outstanding demand of Rs.226,33,63,010/- pertaining to assessment year 2017-18.
2S.A. No. 77/Del/2022
AY: 2017-18
2. Before us, learned counsel for the assessee, while seeking for grant of stay, submitted that the major component of addition giving rise to the demand is on account of disallowance of network connectivity service of Rs. 371,52,91,194/-. He submitted, the demand in relation to the aforesaid addition is not recoverable in terms of order dated 13.02.2019 passed in WP(C) No. 1327/2019, C.M. APPL. No. 6030/2019 of the Hon'ble Delhi High Court, wherein, while considering demand arising out of identical disallowance, the Hon'ble Court had directed that the demand raised in relation to such disallowance/addition should not be recovered. He submitted, following the aforesaid decision of the Hon'ble jurisdictional High Court, the Tribunal while considering assessee's stay application for assessment year 2015- 16, had granted stay against recovery of entire outstanding demand arising of identical disallowance/addition. Thus, he submitted, recovery of outstanding demand on the addition made on account of disallowance of network connectivity service has to be stayed. Proceeding further, he submitted, demand of Rs.30,56,02,660/- was on account of disallowance of annual licence fee amounting to Rs.57,08,35,498/-, claimed as revenue expenditure. He submitted, while deciding identical issue in 3 S.A. No. 77/Del/2022 AY: 2017-18 assessee's own case in assessment year 2014-15, the Tribunal has deleted the disallowance. Thus, he submitted, the issue is squarely covered in favour of the assessee. Therefore, the demand relating to such disallowance is not enforceable.
3. As regards, balance demand of Rs.5,53,67,132/- pertaining to addition on account of adjustment to ALP of international transaction amounting to Rs.10,34,20,319/-, learned counsel for the assessee submitted, the Department has already adjusted the refund due to the assessee of Rs.8,66,26,176/- against the demand raised in the assessment order. Therefore, the assessee may not be directed to pay any further amount and the recovery of the outstanding demand should be stayed.
4. Learned Departmental Representative submitted, the assessee may be directed to pay 20% of the outstanding demand.
5. We have considered rival submissions and perused the materials on record. On going through the materials on record, we are of the view that the demand arising out of disallowance of network connectivity service cannot be enforced in view of the decision of the Hon'ble jurisdictional High court in assessee's own case, as, in the order, referred to above, the Hon'ble Court has given a clear direction to the Assessing Officer, not to recover any 4 S.A. No. 77/Del/2022 AY: 2017-18 demand arising out of the disallowance of network connectivity service.
6. Following the aforesaid decision of the Hon'ble Delhi High Court, the Tribunal has also stayed the recovery of such demand in assessment year 2015-16 vide S.A. No. 311/Del/2020, dated 10.11.2020. Therefore, keeping in view the order of the Hon'ble jurisdictional High Court and the Tribunal in assessee's own case, as referred to above, we are of the view that the demand arising out of addition made on account of network connectivity service, needs to be stayed. Insofar as, the demand arising out of disallowance of annual licence fee, on going through the material on record, prima facie, we are convinced that the issue has been decided in assessee's favour in its own case in assessment year 2014-15. Therefore, in our view, the demand pertaining to disallowance of annual licence fee, needs to be stayed. This leaves us with balance demand of Rs.5,53,67,132/- arising out of addition of Rs.10,34,20,319/- made on account of determination of ALP of international transaction. We are informed, Revenue has already adjusted the refund due of Rs.8,66,26,176/- against the outstanding demand of the impugned assessment year, 5 S.A. No. 77/Del/2022 AY: 2017-18 which is sufficient to protect the interest of Revenue. Learned Departmental Representative could not controvert the aforesaid factual position. Thus, keeping in view the overall facts and circumstances, prima facie case and balance of convenience, 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 the disposal of the corresponding appeal of the assessee, whichever is earlier.
7. Further, with the consent of both the parties, we grant early hearing of the corresponding appeal of the assessee. Accordingly, Registry is directed to fix the appeal for hearing on 10.05.2022. Paper-books, if any, must be filed by the parties sufficiently ahead of the scheduled date of hearing. Since, the date of hearing of the appeal was announced in the open court in presence of both the parties, issuance of separate notice of hearing to the parties is hereby dispensed with. We make it clear, genuine effort should be made by both the parties to ensure that hearing of appeal takes place on the scheduled date. In case of any adjournment being sought by the assessee without any compelling reasons, the assessee may run the risk of vacation of stay.
6S.A. No. 77/Del/2022
AY: 2017-18
8. With the aforesaid observations, the stay application is allowed, as indicated above.
Order pronounced in the open court on 11th March, 2022 Sd/- Sd/-
(R.K. PANDA) (SAKTIJIT DEY)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Dated: 11th March, 2022.
RK/-
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(A)
5. DR
Asst. Registrar, ITAT, New Delhi