HONDA MOTOR CO., LTD.,JAPAN V. DEPUTY COMMISSIONER OF INCOME TAX, DDIT/ADIT (INTERNATIONAL TAXATION), NOIDA, NOIDA

SA 90/DEL/2025

AI Insights

The case involves Honda Motor Co. Ltd., the applicant, seeking a stay on the recovery of outstanding tax demands related to transfer pricing adjustments for the assessment years 2018-19 and 2022-23. The demands arose from the secondment of employees, which was argued to be on a cost-to-cost basis. The applicant referenced a similar case involving Honda R & D Company Ltd., where a stay was granted under identical circumstances. The department suggested a pre-condition of depositing 20% of the outstanding demand for the stay, which was not accepted by the Tribunal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 39365 (ITAT-DELHI)
• Appeal Type: Stay Application
• Pronouncement Date: 21-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2022-2023
• Other Referred Cases: Honda R & D Company Ltd. in SA No. 62/Del/2025
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMIT KATOCH
• Keywords: Reasonable cause; Application of stay

Judgement Text

" आयकर अपीलीय अिधकरण िदʟी पीठ “डी”, िदʟी ŵी िवकास अव̾थी, Ɋाियक सद˟ एवं ŵी नवीन चंū, लेखाकार सद˟ क े समƗ IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “D”, DELHI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER & SHRI NAVEEN CHANDRA, ACCOUNTANT MEMBER SA Nos. 89 & 90/Del/2025 (Arising out of ITA Nos. 912 & 913/Del/2025, A.Ys 2018-19 & 2022-23) Honda Motor Co. Ltd., 2-1-1, Minami-Aoyama, Minato-Ku, Tokyo, Japan 1078556 PAN: AACCH3050J ...... आवेदक/Applicant बनाम Vs. Deputy Commissioner of Income Tax, DDIT/ADIT International Taxation, R No. 602, 6th floor, Aayakar Bhawan, A-2D, Sector 24, Gautam Budh Nagar, Noida, Uttar Pradesh 201307 ..... ᮧितवादी/Respondent आवेदक/Applicant : Shri Kamal Sawhney, Advocate ŮितवादीȪारा/Respondent by : Shri Amit Katoch, Sr. DR सुनवाई कᳱ ितिथ/ Date of hearing : 21/02/2025 घोषणा कᳱ ितिथ/ Date of pronouncement : 21/02/2025 आदेश/ORDER PER VIKAS AWASTHY, JM: These two applications have been filed by the assessee for seeking stay of recovery of outstanding demand, for assessment years 2018-19 & 2022-23. 2. Shri Kamal Sawhney, appearing on behalf of the assessee submits that the total demand outstanding in the impugned assessment years Rs. 38,17,69,120/- in AY 2018- 19 & Rs.7,35,01,750/- in AY 2022-23 have arisen from TP adjustment on account of 2 SA Nos.89 & 90/DEL/2025 secondment of employees. The reimbursement of seconded employees is on cost to cost. This fact has not been disputed by the Revenue. He contended that once reimbursement is on cost to cost base, there is no scope of any adjustment. The ld. Counsel pointed that the co-ordinate Bench in the case of assessee’s group company Honda R & D Company Ltd. in SA No. 62/Del/2025 vide order dated 07.02.2025 has stayed the recovery of outstanding demand. The facts in the instant appeals are identical. Even the secondment agreement is identically worded. The ld. Counsel thus, prayed for stay of recovery of outstanding demand in both the impugned assessment years. 3. Shri Amit Katoch, representing the department submitted that the assessee may be directed to deposit 20% of the outstanding demand as a pre-condition for availing the benefit of stay. 4. Both sides heard. Considering submissions of the assessee, prime facie, we are of view that the assessee deserves the benefit of stay of recovery of outstanding demand in impugned assessment years. The recovery of outstanding demand is stayed for a period of 180 days from the date of this order or till the disposal of appeal(s), whichever is earlier. 5. The assessee may file paper book, if so advised before the next date of hearing with an advance copy to the opposite side, in accordance with ITAT Rules. 6. The Registry is directed to fix the appeals for hearing on 27.03.2025 along with ITA No. 548/Del/2025. Since, the date of hearing of appeal has been announced in the open court in presence of both sides, issuance of separate notice of hearing to the parties is dispensed with. 3 SA Nos.89 & 90/DEL/2025 7. The assessee shall not seek adjournment on the date fixed for hearing, without there being any reasonable cause. In the result, both Stay Applications of the assessee are allowed, in the terms aforesaid. Order pronounced in the open court on Friday the 21st day of February, 2025. Sd/- Sd/- (NAVEEN CHANDRA) (VIKAS AWASTHY) लेखाकार सद˟/ACCOUNTANT MEMBER Ɋाियक सद˟/JUDICIAL MEMBER िदʟी / Delhi, ᳰदनांक/Dated 21/02/2025 NV/- ᮧितिलिप अᮕेिषतCopy of the Order forwarded to : 1. अपीलाथᱮ/The Appellant , 2. ᮧितवादी/ The Respondent. 3. The PCIT 4. िवभागीय ᮧितिनिध, आय.अपी.अिध., िदʟी /DR, ITAT, िदʟी 5. गाडᭅ फाइल/Guard file. BY ORDER, //True Copy// (Dy./Asstt. Registrar) ITAT, DELHI "