HONDA R&D COMPANY LIMITED,JAPAN V. ASSISTANT COMMISSIONER OF INCOME TAX, INTERNATIONAL TAXATION, CIRCLE-2(1)(1), DELHI

SA 62/DEL/2025

AI Insights

The case involves Honda R & D Company Ltd., which filed an application seeking a stay on the recovery of an outstanding tax demand for the assessment year 2018-19. The demand arose from a Transfer Pricing (TP) adjustment related to the secondment of employees, which the assessee argued was on a cost-to-cost basis. The Department of Revenue contended that a 20% deposit of the outstanding demand should be made as a pre-condition for the stay. After hearing both parties, the Tribunal decided to grant the stay, highlighting the need for further examination of the merits of the case during the appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 472460 (ITAT-DELHI)
• Appeal Type: Stay Application
• Pronouncement Date: 07-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2018-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH KUMAR
• Keywords: Reasonable cause; Application of stay

Judgement Text

" आयकर अपीलीय अिधकरण िदʟी पीठ “डी”, िदʟी ŵी िवकास अव̾थी, Ɋाियक सद˟ एवं एम. बालागणेश, लेखाकार सद˟ क े समƗ IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “D”, DELHI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER & SHRI M. BALAGANESH, ACCOUNTANT MEMBER SA No. 62/Del/2025 (Arising out of ITA No. 548/Del/2025, A.Y 2018-19) Honda R & D Company Ltd., 1-4-1, Chuo Wako City, Saitama, Japan 3510193 PAN: AADCH-1981-P ...... आवेदक/Applicant बनाम Vs. Assistant Commissioner of Income Tax, International Taxation, Circle 2(1)(1), Civic Centre, Minto Road, New Delhi 110002 ..... ᮧितवादी/Respondent आवेदक/Applicant : S/Shri Kamal Sawhney, Arun Bhaduria, and Nikhil Agarwal, Advocates ŮितवादीȪारा/Respondent by : Shri Rajesh Kumar, Sr. DR सुनवाई कᳱ ितिथ/ Date of hearing : 07/02/2025 घोषणा कᳱ ितिथ/ Date of pronouncement : 07/02/2025 आदेश/ORDER PER VIKAS AWASTHY, JM: This application has been filed by the assessee for seeking stay of recovery of outstanding demand, for assessment year 2018-19. 2. Shri Kamal Sawhney, appearing on behalf of the assessee submits that the total demand outstanding in the impugned assessment year Rs.4,62,76,590/- has arisen from TP adjustment on account of secondment of employees. The reimbursement of seconded employees is on cost to cost. This fact has not been disputed by the Revenue. To substantiate his contention he referred to DRP directions dated 26.11.2024. He contended that once reimbursement is on cost to cost base, there is no scope of any adjustment. The ld. Counsel thus, prayed for a stay of recovery of outstanding demand. 2 SA No.62/DEL/2025 3. Shri Rajesh Kumar, 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 year. 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, 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 appeal for hearing on 27.03.2025. 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 is dispensed with. 7. The assessee shall not seek adjournment on the date fixed for hearing, without there being any reasonable cause. In the result, Stay Application of the assessee is allowed, in the terms aforesaid. Order pronounced in the open court on Friday the 07th day of February, 2025. Sd/- Sd/- (M.BALAGANESH) (VIKAS AWASTHY) लेखाकार सद˟/ACCOUNTANT MEMBER Ɋाियक सद˟/JUDICIAL MEMBER िदʟी / Delhi, ᳰदनांक/Dated 07/02/2025 NV/- 3 SA No.62/DEL/2025 ᮧि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 "