Income Tax Appellate Tribunal - Delhi
Globallogic India P.Ltd, New Delhi vs Acit, Circle-10(1), New Delhi on 9 September, 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
AND
SHRI SAKTIJIT DEY, JUDICIAL MEMBER
S.A. No.310/Del/2022
[Arising out of ITA No.2138/Del/2022]
Assessment Year: 2018-19
M/s. Globallogic India Pvt. Vs. ACIT,
Ltd., Circle-10(1),
207, Plot No. 5, Gupta New Delhi
Arcade LSC, Mayur Vihar,
Phase-1,
New Delhi
PAN :AABCI2526F
(Applicant) (Respondent)
Applicant by Sh. Neeraj Jain, Advocate
Sh. Abhishek Agarwal, CA
Respondent by Sh. Mrinal Kumar Das, Sr. DR
Date of hearing 09.09.2022
Date of pronouncement 09.09.2022
ORDER
PER SAKTIJIT DEY, JM:
Captioned application has been filed by the assessee seeking absolute stay on recovery of outstanding demand of Rs.13,20,46,630/- pertaining to assessment year 2018-19. S.A. No.310/Del/2022
AY: 2018-19
2. Learned Authorized Representative of the assessee submitted, the disputed demand arises out of the following additions:
i. Transfer pricing adjustment relating to provision of software development services - Rs.12,03,72,561/- ii. Transfer pricing adjustment relating to outstanding receivables from AEs - Rs.9,48,23,612/- iii. Disallowance of deduction under section 10AA of the Act -
Rs.3,27,98,725/-
3. Proceeding further, he submitted, the transfer pricing adjustment in relation to provision of software development services was on account of selection of certain comparables by the TPO. He submitted, four of the comparables selected by the TPO, viz., Larsen and Toubro Infotech Ltd., Infobeans Technologies Ltd., Tata Elxsi Ltd. and Cybercom Datamatics Information Solutions Ltd. have been rejected as comparables by the Tribunal in assessee's own case in past assessment years. He submitted, once these four comparables are removed, the assessee's margin would be within the arm's length margin of the rest of the comparables, requiring no further adjustments.
4. As regards interest charged on outstanding receivables, learned counsel for the assessee submitted, the Tribunal has
2|Page S.A. No.310/Del/2022 AY: 2018-19 consistently decided the issue in favour of the assessee in past assessment years. Hence, the addition has to be deleted. Insofar as disallowance of deduction under section 10AA is concerned, learned counsel submitted, the Assessing Officer has reduced an amount of Rs.3,27,98,725/- from the deduction claimed by the assessee without assigning any reason in the body of the assessment order. Thus, he submitted, such disallowance must have been made by the Assessing Officer inadvertently. Therefore, learned counsel submitted, since, the assessee has a strong case on merits, recovery of the entire demand should be stayed and an early date of hearing of the appeal may be granted.
5. Opposing grant of stay, learned Departmental Representative submitted, the assessee may be directed to pay 20% of the outstanding demand. However, he did not oppose assessee's prayer for early hearing of the appeal.
6. We have considered rival submissions and perused the materials on record. As discussed earlier, the disputed demand arises out of three additions/disallowances. It is noted by us, the additions made on account of transfer pricing adjust in relation to provisions of software development services and interest charged on outstanding receivables may not ultimately survive as identical
3|Page S.A. No.310/Del/2022 AY: 2018-19 issues have been decided in favour of the assessee by the Tribunal in past assessment years. Therefore, demand relating to such issues, which are covered in favour of the assessee, cannot be enforced.
7. As regards disallowance of a part of deduction claimed under section 10AA of the Act, it appears, such disallowance has been made erroneously. Thus, in our view, the assessee has made out a strong prima facie case and balance of convenience in its favour. In view of the aforesaid, we are inclined to grant stay on recovery of outstanding demand for a period of 180 days from the date of this order or till the disposal of the corresponding appeal of the assessee, whichever is earlier.
8. Further, accepting assessee's prayer, we direct the Registry to fix the corresponding appeal for hearing on 17.11.2022, on an out of turn basis. Paper-books, if any, must be filed by the parties sufficiently ahead of the date of hearing of the appeal. Since, the date of hearing of appeal was announced in the open court, in presence of both the parties, there is no need for issuance of separate notice of hearing to the parties. Further, we make it clear, in case, the assessee seeks adjournment without any compelling reasons, it will run the risk of vacation of stay.
4|Page S.A. No.310/Del/2022 AY: 2018-19
9. In the result, the stay application is allowed, as indicated above.
Order pronounced in the open court on 9th September, 2022 Sd/- Sd/-
(G.S. PANNU) (SAKTIJIT DEY)
PRESIDENT JUDICIAL MEMBER
Dated: 9th September, 2022.
RK/-
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(A)
5. DR
Asst. Registrar, ITAT, New Delhi
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