AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2019 (11) TMI 265
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....t of substantial amount of outstanding demand and, in this regard, he submitted following table highlighting the position of outstanding demand in each of the years:- A. As per last order (Amt. in Rs.) S No Particulars AY 2010-11 AY 2011-12 AY 2012-13 AY 2013-14 1 Tax payable after TDS and Selfassessment tax 33,21,47,203 36,58,59,992 37,36,30,568 38,61,19,079 2 Total demand outstanding including interest 47,23,56,951 55,85,86,885 50,05,25,305 67,22,32,594 3 Pre-deposit (Post final asst order) 17,89,00,000 20,50,00,000 19,50,00,000 13,70,00,000 4 Balance demand outstanding (2)-(3) 29,34,56,961 35,35,86,885 30,55,25,305 53,52,32,594 5 % of pre-deposit out of total demand (3)/(2) 37.87% 37.87% 38.96% 20.38% 6 % of pre-deposit out of total demand (Average) 33.48% 7 % of pre-deposit on tax component of total demand (3)/(1) 53.86% 56.03% 52.19% 35.48% 8 % of pre-deposit on tax component of total demand (Average) 49.39% Note: TDS to the tune of Rs. 66,59,674 and Rs. 11,19,969 were not allowed as credit by the Assessing Officer for AYs 2011-12 and 2013-14 respectively. B. If ....
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....ubmitted that the sales of the Assessee in automobile segment fell and Year-to-date sales as on August 2019 fell less to Rs. 1952.8 crore compared to Rs. 2,328.5 crore in August 2018. There was a dip in sale of 16%. As a result, the Year-to-date operating income as on August 2019 was Rs. 86.80 crore when compared to Rs. 179.1 crore in August 2018. It was pointed out that the dip in operating income of 51% due to reduction in sales and the present quantities are being sold by giving additional discounts. To tackle the liquidity crunch in working capital, inventory level were reduced from Rs. 1,038.9 crore in December 2018 to Rs. 887.7 crore in August 2019 Working capital loan as on 30th September 2019 was Rs. 605 crore from banks and other group companies. It was submitted that the Monthly interest payout on account of the borrowings is approximately Rs. 5.5 crore every month. It was submitted that the Crisis in the CV industry is expected to continue in the upcoming quarters as well and the liquidity crunch of Volvo is expected to worsen further. 5. The following details of position regarding availability of funds was given:- Details of bank balances as on 30th September 2019: ....
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....sfer Pricing adjustment in Manufacturing Segment * Difference in Import Content of Raw Materials. It was submitted that during the years under consideration, the applicant has import significant amount of raw material as against very low content of raw material in the case of the comparable companies selected by the TPO. It was submitted that the transfer pricing adjustment was deleted after making comparability adjustment on account of difference in the value of import contents in the following cases:. [ Skoda Auto India (P) Ltd. v. ACIT (30 SOT 319) (Pune), Toyota Kirloskar Motors Pvt. Ltd. v. ACIT, Bangalore (ITA No. 828/Bang/2010), Doowon Automotive Systems India Private Limited vs. DCIT (ITA No. 692/Mds/2016), Demag Cranes & Components (India) Pvt. Ltd. v. DCIT, Pune in ITA No.120/PN/201 1, Putzmeister Concrete Machines Pvt. Ltd. v. DCIT, Panaji - ITA No. 107/PNJ/2012] * Applicant engaged in low value added assembly function It is submitted that the applicant imports components from Volvo Group for its assembly function under manufacturing segment. It is pertinent to note that the applicant carries out very minimal value addition and most of the components are import....
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....ough the same was not claimed in the return of income [Page No. 5 of stay paper book - 1]. It is submitted that as no claim was made by the Petitioner in the return of income, separate disallowance cannot be made and any such action is tantamount to double disallowance. It is brought to the attention of the Hon'ble Tribunal a rectification application in this regard was filed before the AO dated 16.02.2015 [Page No. 150 to 151 of stay paper book - 1] and the same is still pending. 6. Disallowance of depreciation on assets acquired from Ingersoll Rand 12,46,88,907 7,91,28,750 6,05,23,354 4,64,66,019 GIST OF ARGUMENTS Covered in favour of the Petitioner by the decision of Hon'ble ITAT for AY 2008-09 [ Para 47 to 51 from Pg.32 to 35 of case laws paper book - 1]. 7. Addition of Special Additional Duty of Customs / refund of Countervailing Duty credited to P&L account but not accrued in the year 12,63,29,715 10,54,04,678 3,81,85,122 3,08,65,112 GIST OF ARGUMENTS Covered in favour of the Petitioner by the decision of Hon' ble ITAT for AY 2008-09 [Para No.25 to 27 from Pg. 18 to 20 of case laws paper book - 1]. It is further submitted that....
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....t the contentions of the Assessing Officer cannot be upheld for the followingHowever, the Assessing Officer disallowed the entire expenditure in the years under consideration when payments were made inter-alia for the reason that (i) once the provision is reversed at the beginning of the year, the same ceases to be for the purpose of business and therefore, cannot be allowed under section 37 of the Act; (ii) the application of section 40(a)(ia) of the Act is only upon an expenditure falling in the ambit of business expenditure and since these expenditure are not business expenditure. provisions of section 40(a)(ia) of the Act would not be applicable; and (iii) the same are prior period expenses which cannot be allowed in the year under consideration. The claim of expenditures were disallowed suo-moto by the Petitioner in the AYIt is submitted that the contentions of the Assessing Officer cannot be upheld for the following reasons: a. The claim of expenditures were disallowed suo-moto by the Petitioner in the AY 2010-11 and 2011-12 for the reason that the same were not crystallised in those years. Having accepted the same in those years, the AO ought to have allowed the same i....
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....s deducted in the subsequent assessment year, then such expenditure shall be allowed as a deduction in computing the income of the previous year in which the tax has been paid. Even in the instant case, as the expenditure was not claimed in the year in which the services were received, but in the subsequent AY where tax was deducted at source. then the same is to be allowed in the years under consideration. For ready reference, the 1st proviso to section 40(a)(ia) as was applicable for the years under consideration reads as under: "Provided that where in respect of any such sum, tax has been deducted in any subsequent year, or has been deducted during the previous year but paid after the due date specified in sub-section (1) of section 139, such sum shall be allowed as a deduction in computing the income of the previous year in which such tax has been paid." e. Reliance in this regard is also placed upon the decision of the Bangalore Bench of the Tribunal in the case of IKA India Pvt Ltd vs ACIT: 101 taxmann.com 276 (Bang ITAT) [Page No.722 to 723 of case laws paper book - IV] wherein it was held that even if the crystallisation of the expenses is in the earlier assessment year, ....
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....unds against the demand. Before the Tribunal, the department accepted that the 245 refund adjustment was not proper and said a proper order would be passed. The AO then passed an order u/s 220(6) in which he held that the adjustment of refunds was in order on the ground that (i) an adjustment of refunds was not a "recovery" and (ii) though some issues were covered in favour of the assessee, the decision had not become final as the department was in appeal. The Tribunal then passed a stay order in which it accepted the AO's stand that an adjustment of refund was not a "recovery". It was also held that action u/s 245 was not "mala fide". The assessee filed a writ petition to challenge the adjustment of refunds. The Hon'ble High Court laid down the following principles to be followed in such cases:- (i) S. 220(6) has no application to a case where an appeal is filed before the Tribunal though the Tribunal has inherent power to grant stay. The order passed u/s 220(6) is null and void. The Tribunal should have decided the stay application instead of calling upon the AO to dispose of the application u/s 220(6); (ii) It is wrong to say that an adjustment of refund u/s 245 is not a "....
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....ax. 8. The above decision lays down two propositions which are relevant in the present case, viz., (i) The term "recovery" is comprehensive and includes adjustment thereby reducing the demand; (ii) It will be specious & illogical for the Revenue to contend that if an issue is decided in favour of the assessee giving rise to a refund in an earlier year, that refund can be adjusted u/s 245, on account of the demand on the same issue in a subsequent year. 9. The Ld A.R thus submitted that the assessee has a prima facie case, the balance of convenience is in favour of granting the stay. Otherwise the assessee would be put to great hardship. He, therefore, prayed that the recovery of outstanding demand for assessment years 2010-11 to 2013-14, which are subject matter of appeals before the Tribunal should be stayed. 10. The Ld D.R submitted that the assessee should be directed to pay atleast 50% of the outstanding demand as a condition for granting stay and that there cannot be any stay on adjustment of refund against outstanding demand as it is a statutory right conferred on the revenue u/s.245 of the Act. 11. We have given careful consideration to the rival submissions. The fac....