Income Tax Appellate Tribunal - Hyderabad
Zuari Cement Limited, Kadapa, Kadapa vs Assessee on 31 July, 2015
IN THE INCOME TAX APPELLATE TRIBUNAL
HYDERABAD BENCH "A", HYDERABAD
BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER
AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER
S.A. No. 28/Hyd/2015
(in ITA No. 461/Hyd/2015
Assessment Year : 2010-11)
Zuari Cement Ltd., Hyderabad vs. Asst. Commissioner of Income Tax
, Circle - 1 , Hyderabad.
PAN - AAACZ1270E
(Applicant) (Respondent)
Assessee by : Shri K.R. Vasudevan
Revenue by : Shri D. Srinivas
Date of hearing 31-07-2015
Date of pronouncement 31-07-2015
ORDER
PER SAKTIJIT DEY, J.M.:
Assessee has filed the aforesaid application seeking stay recovery of outstanding demand of Rs. 45,90,34,380 pertaining to AY 2010-11. The details of additions giving rise to the demand in question as mentioned in the notes submitted before us are as under:
S. Issue Addition (Rs.) Tax effect
No. (Rs.)
1. Transfer pricing 42,54,21,060 14,46,00,612
adjustment
2. Disallowance of 55,77,10,527 18,95,65,808
additional depreciation
3. Disallowance of 58,87,771 20,01,253
community
development
expenses
4. Disallowance of give 12,30,916 4,18,388
aways
5. Disallowance of 23,86,166 8,11,058
contribution to Zuari
School
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S.A. No. 28/Hyd/2015
Zuari Cements Ltd.
2. Ld. AR submitted, as far as the issue relating to transfer pricing adjustment is concerned, it is covered in favour of assessee by virtue of order passed by ITAT, Hyderabad in assessee's own case for AY 2009-10 wherein the Tribunal did not uphold any transfer pricing adjustment made by AO/TPO. Thus, it was submitted that the dispute being similar to the issued decided by ITAT in AY 2009-10, the demand pertaining to TP adjustment will not survive. Ld. AR submitted, as far as the disallowance of additional depreciation is concerned, which constitutes major portion of the demand, the disallowance made is not legally sustainable as additional depreciation claimed by assessee for an amount of Rs. 55,77,10,527 is on new plant and machinery put to use during the relevant AY. He further submitted, disallowance against different expenditures amounting to Rs. 95,04,853 is also bad in law as such expenditures are wholly and exclusively for the purpose of business. He submitted, in AY 2009-10, in assessee's own case DRP has allowed expenditure of similar nature. Further, ld. AR submitted, while making disallowance of additional depreciation as well as depreciation on goodwill AO has committed mistake and for rectification of which assessee has filed a petition u/s 154 before AO, which is pending. If, effect is given to rectification petition, demand will reduce by a sum of Rs. 8,54,69,677. Thus, it was submitted by ld. AR, if appeal is heard on merit, demand raised by AO will not survive. It was submitted, as against the aforesaid factual position, assessee is to get back refund to the tune of Rs. 25,49,96,800 for the AYs 2008-09, 2009-10 and 2014-15. Thus, it was submitted by ld. AR, as assessee is having a strong prima-facie case and balance of convenience is also in favour of assessee, recovery of the entire outstanding demand may be stayed.
3. Ld. DR, on the other hand, opposed grant of absolute stay.
3 S.A. No. 28/Hyd/2015Zuari Cements Ltd.
4. We have considered the submissions of the parties and perused the materials on record. At this stage of proceeding, we are not required to examine in detail the merits of the additions made by AO/TPO. However, on prima-facie consideration of facts and materials on record as well as the fact that assessee is to get back huge amount of refund from the department (Rs. 25,49,96,800 as claimed by assessee) and also considering the fact that corresponding appeal of assessee is fixed for hearing on 29/10/2015, we are inclined to stay recovery of the entire outstanding demand for a period of six months from the date of this order or till the disposal of corresponding appeal of assessee, whichever is earlier. We make it clear that assessee should not take any unnecessary adjournment, which may entail vacation of this interim order granted by us.
5. In the result, S.A. filed by assessee is allowed.
Pronounced in the open court on 31/07/2015 upon conclusion of hearing.
Sd/- Sd/-
(B. RAMAKOTAIAH) (SAKTIJIT DEY)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Hyderabad, Dated: 31 st July, 2015
kv
Copy to:-
1) Zuari Cement Ltd., Krishnanagar, Yerraguntla, Kadapa
2) ACIT, Circle - 1, Kadapa
3) DRP, Hyderabad
4) DIT, International Taxation, Hyderabad
5) The Departmental Representative, I.T.A.T., Hyd.
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S.A. No. 28/Hyd/2015
Zuari Cements Ltd.
Description Date Intls
1. Draft dictated on Sr.P.S.
2. Draft placed before author Sr.P.S
3 Draft proposed & placed before the second Member AM
4 Draft discussed/approved by second Member VP
5 Approved Draft comes to the Sr.P.S./PS Sr.P.S.
6. Kept for pronouncement on Sr.P S.
7. File sent to the Bench Clerk Sr.P.S.
8 Date on which file goes to the Head Clerk
9 Date of Dispatch of order