Tribunal grants conditional stay for 180 days, imposes payment terms, and schedules expedited hearings

The Tribunal granted a conditional stay of demand for 180 days from the date of the order, requiring the assessee to pay Rs. 15 crores by a specified date, promptly settle the refund due in the name of the amalgamating company, and schedule cases for out-of-turn hearings. Failure to meet these conditions would lead to the cancellation of the stay. The order was pronounced on 13.03.2018, resolving the stay petitions concerning outstanding tax demands, deduction claims, comparables in transfer pricing, and technical refund difficulties.

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Issues Involved:
Stay of outstanding demand of tax and interest for assessment years 2011-12, 2012-13, and 2013-14; Prima facie case for deduction u/s. 10A for three units in assessment year 2011-12; Selection of comparables in transfer pricing adjustment for assessment years 2012-13 and 2013-14; Refund due for assessment year 2015-16; Refund due in case of an amalgamated company; Technical difficulties in adjusting refund with outstanding demand; Grant of stay of demand with conditions.

Analysis:

1. Stay of Outstanding Demand:
The assessee sought a stay of outstanding demand of tax and interest for assessment years 2011-12, 2012-13, and 2013-14. The total assessed tax for these years amounted to Rs. 2,14,27,36,020. The assessee claimed a refund due for assessment year 2015-16 and another refund due in the case of an amalgamated company, reducing the outstanding amount to Rs. 72,70,29,157.

2. Prima Facie Case for Deduction u/s. 10A:
For assessment year 2011-12, the primary issue was the grant of deduction u/s. 10A for three units. The counsel of the assessee argued that the issue was covered in favor of the assessee based on the Tribunal's decision in the assessee's own case. Regarding assessment years 2012-13 and 2013-14, the issue revolved around the selection of comparables in transfer pricing adjustment.

3. Selection of Comparables in Transfer Pricing Adjustment:
The Departmental Representative contended that the Assessing Officer's selection of comparables in assessment year 2014-15 would lead to a substantial deduction in the demand for the current years if the same comparability standard was followed. The representative argued against the use of very high turnover comparables, stating that courts have ruled against comparing companies with significantly different turnovers.

4. Refund Due and Technical Difficulties:
The Departmental Representative highlighted technical difficulties in adjusting a refund claimed by the assessee, amounting to Rs. 28,21,77,258, which was due in the name of an amalgamating company with a different PAN number. The representative proposed that the payment be made within 60 days and requested the assessee to make the payment accordingly.

5. Grant of Stay with Conditions:
After hearing both parties, the Tribunal concluded that the assessee had a prima facie case and granted a conditional stay of demand. The conditions included the payment of Rs. 15 crores by a specified date, prompt payment of the refund due in the name of the amalgamating company, and fixing the cases for out-of-turn hearing. Failure to fulfill the conditions would result in the cancellation of the stay.

6. Conclusion:
The Tribunal granted a stay of demand for 180 days from the date of the order, subject to the specified conditions. The stay petitions were disposed of accordingly, with the order pronounced on 13.03.2018.

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