GOODYEAR INDIA LIMITED,HARYANA V. JAO - ASSISTANT COMMISSIONER OF INCOME TAX (OSD), DELHI, NEW DELHI

SA 79/DEL/2025

AI Insights

Goodyear India Limited filed a stay application against the recovery of an outstanding demand of Rs. 20,49,96,560, which arose from ITA no. 5212/Del/2024 for the assessment year 2021-22. The demand was based on various transfer pricing adjustments and disallowances made by the Assessing Officer, which included additions related to trademark fees, regional service charges, and advertisement expenses. The Tribunal considered the history of similar issues in previous years, where they were either decided in favor of the assessee or restored to the TPO for re-examination. The Tribunal's decision to grant a stay was influenced by these precedents and the fact that a significant portion of the demand had already been adjusted against the assessee's refund.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 30521 (ITAT-DELHI)
• Appeal Type: Stay Application
• Pronouncement Date: 21-02-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: I
• Assessment Year: 2021-2022
• Other Referred Cases: M/s Expeditors International of Washington Inc. v. ACIT, Circle International Tax 1(2)(2), Delhi in WP(C) 11032/2022 & C.Mo. No. 32314/2022
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SAHIL KUMAR BANSAL
• Assessee Lawyers: AJAY VOHRA; .; . NEERAJ JAIN; LD. CPC
• Keywords: Transfer pricing; International transaction; Application of stay
• Section: 143(3); 143(1); 234B; 144C

Judgement Text

"1 SA no. 79/Del/2025 Arising out of ITA no. 5212/Del/2024 Goodyear India Limited IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH: ‘I’: NEW DELHI) BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENT, AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER SA No.: 79/Del/2025 Arising Out of ITA No.: 5212/Del/2024 (Assessment Year: 2021-22) Goodyear India Ltd., Mathura Road, Ballabhgarh, Faridabad-121004 Haryana v. JAO- ACIT(OSD), New Delhi. PAN No: AAACG 3511 H APPELLANT RESPONDENT Assesseeby : Shri Ajay Vohra, Sr. Adv. ,Shri. Neeraj Jain, Adv. &Shri Ramit Katyal, AR; & Ms. Richa Aggarwal, AR Revenue by : Shri Sahil Kumar Bansal, Sr. DR Date of Hearing : 21.02.2025 Date of Pronouncement : 21.02.2025 ORDER PER RAMIT KOCHAR, AM: The assessee has filed this stay application bearing no. 79/Del/2025 which has arisen from ITA no. 5212/Del/2024 for assessment year 2021-22, seeking stay on recovery of outstanding demand towards income-tax and interest , aggregating to Rs. 20,49,96,560/-. 2 SA no. 79/Del/2025 Arising out of ITA no. 5212/Del/2024 Goodyear India Limited 2. The assessee has stated in the stay application that it filed its return of income for impugned assessment year on 11.3.2022,declaring total income of Rs. 192,39,76,262/-. Assessment has been completed vide order dated 22.10.2024 passed by learned Assessing Officer u/s 143(3) read with section 144C of the Income-tax Act, 1961 (“the Act”), assessing total income of the assessee at Rs. 254,87,63,870 after making the following additions: (i) Transfer pricing addition of Rs. 11,65,02,005 in relation to international transaction of trade mark fees, (ii) Transfer pricing addition of Rs. 2,66,96,144 in relation to international transactions of purchase and sale of finished goods (iii) Transfer pricing addition of Rs. 41,91,42,207 in relation to international transactions of payment of Regional Service Charges (\"RSC') (iv) Transfer pricing addition of Rs. 3,30,35,961 in relation to international transactions of payment of Accounting Support Services fees (v) Disallowance of 30% of advertisement and Brand building expenses and sales promotion expenses amounting to Rs. 2,53,22,398. (vi) Addition of Rs. 40,88,891 made by CPC under section 143(1) on account of excess provision written back. 2.2 It was submitted in stay application that consequential to the aforesaid additions made, the AO has raised the demand of Rs. 22,11,93,360/- ,as under: Income tax Rs. 15,34,11,787 Interest u/s 234A Rs. 54,32,508 Interest u/s 234B Rs. 5,83,99,461 3 SA no. 79/Del/2025 Arising out of ITA no. 5212/Del/2024 Goodyear India Limited Interest u/s 234C Rs. 28,05,669 Total: Rs. 22,11,93,360 2.3. It is further stated that the Department has adjusted the refund of Rs. 1,61,96,800/- vide challan dated 16.1.2025(challan number 04465/ CIN 25011500069232SBIN- challan placed on record in file), and nowremaining outstanding demand is to the tune of Rs. 20,49,96,560/-. The learned counsel for the assessee prayed for the stay of the balance outstanding demand of Rs. 20,49,96,560/-. 2.4. The learned counsel for the assessee Shri Ajay Vohra, Senior Advocate drew our attention to a summary of demand which is filed in paper book in the form of chart ,which is as under: Particulars Computation of demand Prima Facie Case Demand Tax @ 25.168%Interest u/s 234A & 234B Total After removing demand on issue covered in own case + group company Remarks Transfer Pricing Adjustment Trademark Fees (TP) 116,502,005 29,321,225 11,902,529 41,223,753 - Issue decided in favour of applicant by ITAT in preceding years from AY 2006- 07 to 2018-19. {Refer para 11 at page no. 44 of PPB]-ITAT, Delhi Bench ‘I’ Order dated 26.07.2024 in ITA No. 346/Del/ 2022 & ITA No. 1451/Del/ 2022 -AY(s):2017- 18 & 2018-19 Trading Segment 26,694,144 6,718,886 2,727,435 9,446,320 - This issue has been restored back to file of TPO in applicant’s case for AY 2017- 18 & 2018-19. 4 SA no. 79/Del/2025 Arising out of ITA no. 5212/Del/2024 Goodyear India Limited {Refer para 28 at pages 59of PPB] ITAT, Delhi Bench ‘I’ Order dated 26.07.2024 in ITA No. 346/Del/ 2022 & ITA No. 1451/Del/ 2022 -AY(s):2017- 18 & 2018-19 Regional Support Services (RSC) 419,142,207 105,489,711 42,822,028 148,311,739 - This issue has been restored back to file of TPO in applicants case for AY 2017-18 & 2018-19. [Refer para 33 & 34 at Pages 62-63 of PPB] ITAT, Delhi Bench ‘I’ Order dated 26.07.2024 in ITA No. 346/Del/ 2022 & ITA No. 1451/Del/ 2022 -AY(s):2017- 18 & 2018-19 The matter has been decided in favour of GSATL (a group company) by Pune Bench of ITAT in AY 2014- 15 & 2015-16. No adjustmentby TPO in GSATL case for AY 2017-18 & 2018-19.- ITAT, Pune Bench Order dated 22.10.2020 in ITA no. 1736/Pun /2018 for AY: 2014-15 & 1763/ Pun/2019 Accounting Support Services (GBS) 33,035,961 8,314,491 3,375,148 11,689,638 - This issue has been restored back to file of TPO in applicant’s case for AY 2017-18 & 2018-19. {Refer para 33 & 34 at Pages 62-63 of PPB] Corporate Tax Disallowance Disallowance of 30% of expenditure incurred on advertisement and publicity 25,322,398 6,373,141 2,587,085 8,960,226 - Issue decided in favour of applicant for AY 2006-07 & 2018-19. (Refer page no. 64 of PPB] Addition made by CPC on account of 4,088,891 1,029,092 417,745 1,446,837 - Double addition has been made by assessing 5 SA no. 79/Del/2025 Arising out of ITA no. 5212/Del/2024 Goodyear India Limited excess provison written back officer, applicant has already such income to tax in its income Tax return 624,787,606 157,246,545 63,831,969 221,078,514 - Tax Demand 221,078,514 - - Demand already adjusted vide challan dated 16.01.2025 (16,196,800) 2.5 It is prayed by the learned counsel for the assessee that the additions which were made by the AO, are mostly recurring/repetitive in nature as these additions were also made in the earlier years in assessee’s own case, and have been decided either in favour of the assessee by the ITAT wherein the additions have been deleted or otherwise they are being restored to the file of the TPO with directions. So far as addition of Rs. 40,88,891/- made by ld. CPCu/s 143(1) is concerned ,it was submitted that it is double addition, as the assessee had suo motu offered for taxation the aforesaid amount in the return of income filed with Revenue of the excess provisions written off to the tune of Rs. 40,88,891/- ,which has now been again added to the income of the assessee by ld. CPC. 2.6Thus it was prayed by ld. Counsel for the assessee that the entire remaining outstanding demand of Rs. 20,49,96,560/- be stayed from recovery. 3. Learned Sr. DR opposed the stay application filed by the assessee, and submitted that assessee be directed to deposit at least 20% of the outstanding demand. 6 SA no. 79/Del/2025 Arising out of ITA no. 5212/Del/2024 Goodyear India Limited 4. We have considered the contentions of both the parties and perused the material on record. Without commenting on the merits of the issue ,we are of the considered view that assessee has made out a prima facie case for partial stay on the recovery of the outstanding demand aggregating to Rs. 20,49,96,560/- towards income-tax and interest , for a period of 180 days from the date of this order or till the disposal of the appeal in ITA no. 5212/Del/2024 for assessment year 2021-22 , which ever is earlier . Out of the total demand of Rs. 22.12 crores raised by the Revenue, the AO has already adjusted Rs. 1.62 crores from the refund due to the assessee, which shall continued to be so. As it is observed,without commenting on the merits of the issue,that most of the issues on which additions to the income have been made by the authorities are stated to be recurring/repetitive in nature as the similar additions to the income have been stated to be made in the preceding years in the case of the assessee itself, and the assessee has claimed that these issues were decided by ITAT, Delhi Benches, New Delhi, either in favour of the assessee or have been restoredby ITAT to the file of the learned TPO with directions. The copies of the ITAT order’s are placed on record in file in the form of Paper Book carrying total pages 165. It will be relevant to refer here to the order of Hon’ble Delhi High Court dated 29th July, 2022 in M/s Expeditors International of Washington Inc. v. ACIT, Circle International Tax 1(2)(2), Delhi in WP(C) 11032/2022 & C.Mo. No. 32314/2022. Thus, without commenting on the merits of the issue arising in the appeal in ITA no. 5212/Del/2024, we are of the considered view that 7 SA no. 79/Del/2025 Arising out of ITA no. 5212/Del/2024 Goodyear India Limited the assessee has made out a prima-facie case for stay on recovery of balance outstanding demand of Rs. 20.50 crores to be stayed for a period of 180 days from the date of this order or till the disposal of the appeal in ITA no. 5212/Del/2024, whichever is earlier. The appeal in ITA No. 5212/Del/2024 for assessment year 2021-22 is now listed for hearing before Division Bench, ‘I’ ,ITAT, Delhi Benches, New Delhi, on 25.02.2025. It is directed that the assessee will not seek unnecessary adjournments and will cooperate in early disposal of the appeal in ITA no. 5212/Del/2024 for assessment year 2021-22. The terms and conditions of this stay were announced in the Open Court in the presence of both the parties. We clarify that we have not commented on the merits of the issues arising in the appeal filed by the assessee with ITAT, Delhi Benches, Delhi in ITA no. 5212/Del/2024. We order accordingly. 5. In the result, Stay Application No. 79/Delhi/2025 is partly allowed in the manner as indicated above. Order pronounced in the open courton 21st February, 2025, and reduced to writing and signed on 25. 02.2025. Sd/- Sd/- (MAHAVIR SINGH) (RAMIT KOCHAR) VICE PRESIDENT ACCOUNTANT MEMBER Dated: 25.02.2025. Copy forwarded to: 8 SA no. 79/Del/2025 Arising out of ITA no. 5212/Del/2024 Goodyear India Limited 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, Delhi Benches "