Income Tax Appellate Tribunal - Mumbai
Vishay Semiconductor India Pvt. ... vs Dcit 8(3), Mumbai on 27 February, 2018
IN THE INCOME TAX APPELLATE TRIBUNAL " K", BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM & SHRI RAM LAL NEGI, JM SA No.98/Mum/2018 (Arising Out of ITA No.7504/Mum/2013) (Assessment Year :2009-10) (SA No.99/Mum/2018 (Arising Out of ITA No.7503/Mum/20 12) (Assessment Year :2008-09) SA No.100/Mum/2018 (Arising Out of ITA No.990/Mum/2016) (Assessment Year- 2011-12) M/s. Vishay Semiconductor India Vs. DCIT / ACIT8(3) Pvt.Ltd., ACIT -11(3)(2) SDF#1, Unit No.23 Mumbai SEEPZ, Andheri (East) Mumbai -400 096 PAN/GIR No. AAACS6827Q Appellant) .. Respondent) Assessee by Shri F.V. Irani Revenue by Shri Saurabh Deshpande Date of Hearing 23/02/2018 Date of Pronouncement 27/02/2018 आदे श / O R D E R PER R.C.SHARMA (A.M):
These three stay applications arose out of ITA Nos.-
7504/Mum/2013, 7503/Mum/2012 and 990/Mum/2016.
2. These stay applications are filed by the assessee for stay of demand for A.Y.2008-09, 2009-10 & 2011-12. 2
SA No.98-100/Mum/2018 M/s. Vishay Semiconductor India Pvt. Ltd.,
3. Rival contentions have been heard a nd record perused.
4. Facts in brief are that assessee V SIPL has a manufacturing unit in the Santacruz Electronics and Export Processing Zone in Mumbai (hereinafter referred to as 'SEEPZ') and exports all its products to Associated Enterprises ('AEs') with no local sales in India. Assessee is a manufacturer exposed to less than normal risks primarily undertaking labour intensive assembly type manufacturing activities of semiconductor devices.
5. In the A.Y.2009-10, the learned AO made an addition of Rs 13.53 crores to the assessee's returned income. The DRP confirmed majority of the additions made by the AO vide its directions (after giving certain relief on few grounds raised by the assessee). Consequently, the final assessment order was passed by the AO and a notice of demand under section 156 of the Act was issued raising a demand of Rs.2,53,51,650 on the assessee.
6. Learned AR further highlighted the demand for the years under consideration, which are as under:
Sr. Assessment Year Total Tax demand Tax Demand Demand paid Tax Demand No. (Rs.) paid in outstanding (Rs.) % (Rs.) 1 2008-09 9,80,78,364 4,00,00,000 41% 5,80,78,364 2 2009-10 2,53,51,650 1,26,76,360 50% 1,26,75,290 3 2011-12 93.04,790 50.00,000 54% 43,04,790 3 SA No.98-100/Mum/2018 M/s. Vishay Semiconductor India Pvt. Ltd.,
7. It was further highlighted by learned AR that a survey was conducted by the learned AO in the premises of the assessee on 9 February 2018. During the course of survey, the learned AO provided a summon to the Finance Controller and directed to provide all the accounting records (balance sheet, trial balance, ledgers etc.) of the company and carried out an in-depth questioning with Finance Controller of the company. Further, during the course of survey, the assessee also agreed to make upfront payment of Rs. 1.00,00,000 against outstanding tax demand along-with a commitment to pay additional 1,00,00,000 during the course of next week.
8. As per learned AR, while approximately 46% of tax demand is paid for all the years. The assessee also requested the AO during the course of survey to give some reasonable time to internally discuss the future course of action. He further submitted that the stay of demand is rejected by the department and also coersive actions been taken, therefore, the assessee has approached this ITAT for grant of complete stay from recovery of the outstanding demand until disposal of the appeal filed with this ITAT.
9. With regard to the merit, it was submitted that the additions to the income of VSIPL have been emanated only due to difference in legal interpretation of statutory provisions and based on merits of the case and judicial precedents on the issues, VSIPL is confident of getting the desired relief before the Mumbai ITAT.
4
SA No.98-100/Mum/2018 M/s. Vishay Semiconductor India Pvt. Ltd.,
10. Learned AR further contended that there is incorrect computation of operating margin of VSIPL by treating foreign exchange gain as non- operating in nature. Accordingly, assessee has a strong case on merits and expects that the ITAT would grant relief from the addition made by the learned AO pursuant to directions of DRP.
11. In view of the above, prayer of the assessee was as under:-
• That stay be granted in respect of outstanding demand of Rs. 1,26,75,290 raised by the Respondent, till the disposal of appeal of the Applicant before the Honourable 1TAT;
• That bank account of the Applicant be released and the amount paid by the Applicant/withdrawn by the department from the bank account in excess of the tax demand stayed by the Honourable ITAT shall be refunded to the Applicant;
• That the recovery proceedings should not be initiated against the Applicant till the receipt of the order of the ITAT with regard to the appeal filed against the order of the learned AO under section 143(3) read with section 144C(13) of the Act and for a period of 30 days thereafter;
• That the learned AO, the Tax Recovery Officer, the Commissioner of Income-tax or their subordinates or their successors may be restrained from taking any action as regards recovery of tax, interest including interest under section 220(2) of the Act and penalty levied or leviable for the relevant assessment year;
12. On the other hand, learned DR opposed the stay application and contended that Bank account of the assessee company with HSBC Bank bearing A/c No.003408598860 was attached during the survey and instructed the Bank to issue the cheque or pay orders in the favour of Indian Overseas Bank A/c Income Tax. He further submitted that at time of attachment, there was no stay application pending before any of the authorities and this fact was confirmed by Finance I Controller on oath 5 SA No.98-100/Mum/2018 M/s. Vishay Semiconductor India Pvt. Ltd., u/s. 131 of the I.T. Act. As per learned DR, assessee company was given multiple opportunities to pay the outstanding demand which was outstanding since last 5 to 6 years. To discuss the case, the Pr. CIT-11, Mumbai called the Authorised Representative who had appeared on 07/02/2018 and after discussion, he was directed to pay the demand immediately. After that, no submission was filed by the assessee except the stay application before the Hon'ble Bench on 12/02/2018.
13. Learned DR further submitted that recovery in the case of the assessee is done as per the original demand. After calculating the demand till date (giving effect to the interest u/s. 220 of the I.T. Act), and considering the assessee's payment, there is outstanding demand of Rs.2.37 crores for A.Y. 2008-09 and Rs.1.92 crores for A.Y. 2009-10 and Rs.70.15 lakhs for A.Y. 2011-12. Hence, there is no question of extra recovery by the Department.
14. We have considered rival contentions and carefully gone through the stay application filed by the assessee. We have also deliberated upon the judicial pronouncements cited by learned A.R and D.R before us. We found that assessee has paid substantial demand which works out to be 46% of the tax liability for all the years under consideration. It also appears that during the course of survey also, assessee has paid a sum of Rs.2 Crores. Keeping in view primafacie case of the assessee, as well as the payment already made by the assessee towards the demand for all the three years under consideration, we direct the Department to release all the bank accounts. However, the Department is at liberty to recover 6 SA No.98-100/Mum/2018 M/s. Vishay Semiconductor India Pvt. Ltd., 50% of the tax demand and interest thereon out of the seized account after giving credit of the amount paid by assessee. We mean that department should collect the difference between 50% of the tax and interest thereon and amount already paid. Subject to the above, we grant stay for a period of six months or till the date of passing the order of the Tribunal. Appeals are fixed for hearing on 26/03/2018. We direct accordingly.
15. In the result, stays are disposed of in terms indicated hereinabove.
Order pronounced in the open court on this 27/02/2018
Sd/- Sd/-
(RAM LAL NEGI) (R.C.SHARMA)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Mumbai; Dated 27/02/2018
Karuna Sr.PS
Copy of the Order forwarded to :
1. The Appellant
2. The Respondent.
3. The CIT(A), Mumbai.
4. CIT
DR, ITAT, Mumbai
5. BY ORDER,
6. Guard file.
सत्यापित प्रतत //True Copy//
(Asstt. Registrar)
ITAT, Mumbai