Tribunal Grants Stay on Recovery Demand for Huawei India with Payment Conditions

The Tribunal granted a stay of recovery of the outstanding demand for M/s. Huawei Technologies India P. Ltd. subject to conditions. The petitioner was required to pay Rs. 75 lakhs, with specific deadlines for payment, and comply with procedural requirements for the appeal process. The remaining outstanding demand was stayed until the appeal disposal or statutory period expiration, with the appeal scheduled for an expedited hearing. The stay petition was allowed based on the outlined terms and conditions.

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Issues Involved: Stay of recovery of outstanding demand u/s 10A deduction and transfer pricing for assessment year 2006-07.

Stay of Recovery of Outstanding Demand: The petitioner, M/s. Huawei Technologies India P. Ltd., sought stay of recovery of outstanding demand of Rs. 2,88,54,145/- till the disposal of the appeal in ITA.1338/Bang/2010. The petitioner had already paid Rs. 2,71,67,139/- out of the total demand of Rs. 5,60,21,286/-. The representative argued that the assessee has a prima facie case regarding transfer pricing and deduction u/s.10A. The balance of convenience was said to be in favor of the assessee since around 50% of the demand had already been paid.

Opposition to Stay: The CIT-DR opposed the granting of stay without the assessee making further payments towards the outstanding demand.

Decision and Conditions for Stay: The Tribunal considered the facts and materials on record, noting the outstanding tax of Rs. 3,87,12,021/- (excluding interest) and the interest amounting to Rs. 1,73,09,265/-. It was decided to grant stay subject to certain conditions:
i) The assessee to pay Rs. 75 lakhs, with Rs. 30 lakhs due by 31.03.2012 and Rs. 45 lakhs by 30.04.2012, providing proof of compliance;
ii) Recovery of remaining outstanding demand stayed till appeal disposal or statutory period expiration;
iii) Appeal to be posted on an expedited basis on 05.06.2012;
iv) No separate notice of hearing required as the order suffices as notice;
v) Assessee to file relevant paper books before the hearing, certified as per ITAT Rules, at least 15 days prior, serving a copy to the other party;
vi) Parties advised against seeking unnecessary adjournments without valid reasons.

Result: The stay petition was allowed based on the specified terms and conditions.

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