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<h1>High Court modifies interim stay condition, directs petitioner to pay 1/3 of liability in installments.</h1> The High Court modified the condition for interim stay during appeal, directing the petitioner to pay 1/3rd of the disputed liability in six monthly ... Writ petition – pre-deposit – financial hardship – deemed dividend - Held that:- Appellate authority considered the petition for stay and passed Ext. P6 order, whereby the petitioner was directed to satisfy 50 % of the demand, in 'ten' equal monthly installments, so as to avail the benefit of interim stay - condition imposed by the appellate authority, directing the petitioner to remit 50 % of the disputed liability so as to avail the benefit of interim stay is on the higher side - petitioner is directed to remit 1/3rd of the disputed liability Issues:1. Condition imposed for interim stay during appeal.2. Financial stringency claim and disputed liability amount.3. Applicability of Section 2(22)(e) and deemed dividend.4. Modification of the condition for remittance of disputed liability.Analysis:1. The petitioner challenged a recovery proceeding despite an ongoing appeal and stay petition. The appellate authority directed the petitioner to pay 50% of the demand in monthly installments for interim stay. The petitioner argued lack of financial stringency, while the department cited the case law Commissioner of Income Tax Vs. Mukumdray K Shah (219 ITR 433) to oppose the claim.2. The High Court noted that the issue required finalization based on facts and figures in the appeal. However, considering the contentions, the Court found the 50% remittance condition excessive. The Court directed the petitioner to pay 1/3rd of the disputed liability in six monthly installments, with the first installment due by June 10, 2012, giving credit for any previous deposits made by the petitioner.3. The judgment highlighted the applicability of Section 2(22)(e) regarding deemed dividend in the total income, as raised in the appeal. The Court's decision to modify the condition was based on the perceived fairness and proportionality in light of the relief granted by the appellate authority in broader terms.4. In conclusion, the High Court modified the Ext. P6 order, directing the petitioner to remit 1/3rd of the disputed liability in installments, considering the circumstances and relief granted by the appellate authority. The Writ Petition was disposed of accordingly.
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