2018 (3) TMI 1784 - AT - Income Tax

ITAT Kolkata: Payment Deadline, Property Alienation Prohibition, Conditional Stay Extension

The Appellate Tribunal ITAT Kolkata directed the assessee to pay Rs. 1.20 crores by a specified date and provide evidence of payment to the Registry on ... Stay of demand - assessee willingness to pay 20% of the total demand in consonance with the requirement of the recent CBDT Circular dated 29-02-2016 - TP Adjustment - AMP expenses - DR vehemently relied on the decision of Sony Ericcson Mobile Communication India (P.) Ltd. v. CIT [2015 (3) TMI 580 - DELHI HIGH COURT] arguing that AMP expenditure is an international transaction - HELD THAT: - We are inclined to accept the arguments of the ld. AR to the extent that the appeal filed before us would have to be construed as first appeal and accordingly, the assessee is directed to pay a sum of ₹ 1.20 crores on or before 27-03-2018 and produce the evidence of payment of the same to the Registry on the very same date. The assessee is also directed not to alienate his immovable properties, if any, without the prior consent of the Administrative CIT having jurisdiction over this case in order to protect the interest of the revenue till the arrears are discharged for assessment year 2013-14. AR stated that the appeal for the assessment year 2012-13 i.e. immediately preceding year, is listed for hearing on 02-05-2018 wherein similar issue is involved. Accordingly, we direct the Registry to list this case also along with appeal for assessment year 2012-13 on 02-05-2018. In view of the aforesaid findings, we are inclined to keep the demand in abeyance for a period of six months from today or till the disposal off the appeal whichever is earlier, subject to fulfillment of aforesaid conditions. Issues: Stay application for demand in abeyance for assessment year 2013-14 due to transfer pricing adjustment on AMP expenses.In this judgment by the Appellate Tribunal ITAT Kolkata, the issue revolved around a stay application where the assessee sought to keep the demand of Rs. 6,16,12,850 in abeyance for the assessment year 2013-14 due to a transfer pricing adjustment made on advertising, marketing, and promotion (AMP) expenses amounting to Rs. 15,60,70,679. The assessee argued that apart from the AMP adjustment, all other international transactions were accepted to be at Arm's length by the ld. TPO. The assessee contended that the transaction of AMP did not fall within the definition of international transaction as per Section 92B of the Act, citing the decision of the Hon'ble Delhi High Court in a specific case. The assessee expressed willingness to pay 20% of the total demand in line with a recent CBDT Circular and consented to adjustment of refunds towards tax arrears until the appeal's disposal by the Tribunal. On the other hand, the ld. DR relied on another decision of the Hon'ble Delhi High Court, arguing that AMP expenditure is indeed an international transaction.The Tribunal, after hearing both sides, accepted the arguments of the ld. AR that the appeal before them should be considered as the first appeal. Consequently, the Tribunal directed the assessee to pay Rs. 1.20 crores by a specified date and provide evidence of payment to the Registry on the same day. Additionally, the assessee was prohibited from alienating any immovable properties without the prior consent of the Administrative Commissioner of Income Tax to safeguard the revenue's interest until the arrears for the assessment year 2013-14 were settled. The Tribunal also noted that a similar issue was involved in the appeal for the assessment year 2012-13, scheduled for a hearing on a specific date, and ordered the case to be listed along with the 2012-13 appeal. The Tribunal decided to keep the demand in abeyance for six months or until the appeal's disposal, subject to the fulfillment of the specified conditions. However, if the assessee failed to make the required payment by the deadline, the conditional stay granted would be automatically vacated.In conclusion, the stay application of the assessee was disposed of in accordance with the Tribunal's directions and findings.