ACIT, Central Circle-3(4), Chennai V. M Sukumar Reddy, Chennai

ITA 71/CHNY/2019

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 0786 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-03-2019
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 08-01-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R VIJAYARAGHAVA
• Assessee Lawyers: S VIJAYAPRABHA
• Keywords: Application of stay; Reasonable cause
• Section: 80IB

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH: CHENNAI . . . , ! ' # , $ #% BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER STAY PETITION NO.71/CHNY/2019 (IN IT(TP)A NO.58/CHNY/2018) & '& /ASSESSMENT YEAR: 2014-15 M/S. INTERNATIONAL FLAVOURS & FRAGRANCES PVT. LTD., NO.1-5, SEVEN WELLS STREET, ST. THOMAS MOUNT, CHENNAI 600 016. VS. DY. COMMISSIONER OF INCOME TAX, LARGE TAX PAYER UNIT-2, CHENNAI. [PAN: AAACB 1376K ] ( () /APPELLANT) ( *+() /RESPONDENT) () , - / APPELLANT BY : SHRI R. VIJAYARAGHAVA, ADVOCATE *+() , - /RESPONDENT BY : MS. S. VIJAYAPRABHA, ADDL. CIT . , /$ /DATE OF HEARING : 15.03.2019 01' , /$ /DATE OF PRONOUNCEMENT : 27.03.2019 / O R D E R PER INTURI RAMA RAO, ACCOUNTANT MEMBER : THE PRESENT STAY PETITION IS FILED BY THE ASSESSEE SEEKING STAY OF DEMAND OF RS.4,91,49,730/- FOR THE ASSESSMENT YEAR 2014-15. 2. IT IS SUBMITTED THAT THE DEMAND IN QUESTION HAD ARISEN ON ACCOUNT OF ALP ADJUSTMENT U/S. 92CA OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) ON THE PAYMENT OF CORPORATE SERVICES, SALES A ND MARKETING SERVICES OF RS. 9,88,26,319/- AND DENIAL OF BENEFIT OF DEDUCTION U/S. SP NO.71/CHNY/2019 (IN IT(TP)A NO.58/CHNY/2018) :- 2 -: 80IB OF THE ACT BY HOLDING THAT THE ACTIVITY OF THE APPELLANT DOES NOT AMOUNT OF MANUFACTURING. IT IS SUBMITTED THAT THE ALP ADJUSTMENT WAS MADE BY ADOPTING THE CUP METHOD AS AGAINST THE TNMM ADOPTED BY THE ASSESSEE AS REGARDS TO DENIAL OF BENEFIT U/S. 8 0IB OF THE ACT. IT IS SUBMITTED THAT THE PROCESS OF MANUFACTURING LIQUID FLAVOURS AND DRY MIX POWERS RESULTS IN CHANGE IN NAME OF CHARACTER AND P RODUCED A DISTINCT PRODUCT AND THEREFORE, AMOUNTS TO MANUFACTURING ACT IVITY. IT IS SUBMITTED THAT THE APPELLANT HAS NO FINANCIAL SOURC ES TO PAY THE DISPUTED TAX DEMAND AND IT WAS THUS, SUBMITTED THAT TO STAY THE BALANCE DEMAND. 2. ON THE OTHER HAND, THE LD. SR. DR VEHEMENTLY OPP OSED THE STAY PETITION. 3. WE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE M ATERIAL ON RECORD. THE ASSESSEE COULD NOT MAKE OUT A STRONG PRIMA FACIE CASE ON THE RECEIPTS OF ADDITION TO THE RETURNED INCOME. H OWEVER, CONSIDERING THE FACT THAT THE APPELLANT ALREADY PAID RS. 2 CROR ES OUT OF THE ORIGINAL DEMAND OF RS. 6,91,49,730/-, THE BALANCE DEMAND WIL L BE STAYED SUBJECT TO PAYMENT OF RS. 1 CRORE ON OR BEFORE 31 ST MARCH, 2019. THIS STAY SHALL STAND VACATED, IN CASE THE ASSESSEE-COMP ANY SEEKS ANY ADJOURNMENT FROM HEARING OF APPEAL WITHOUT ANY JUST AND REASONABLE CAUSE. SP NO.71/CHNY/2019 (IN IT(TP)A NO.58/CHNY/2018) :- 3 -: 4. IN THE RESULT, THE STAY PETITION IS ALLOWED ON T HE ABOVE LINES. ORDER PRONOUNCED ON THE 27 TH MARCH, 2019 IN CHENNAI. SD/- SD/- ( . . . ) (N.R.S. GANESAN) /JUDICIAL MEMBER ( ! ' # ) (INTURI RAMA RAO) $ /ACCOUNTANT MEMBER /CHENNAI, 2 /DATED: 27 TH MARCH, 2019. EDN, SR. P.S , */34 54'/ /COPY TO: 1. () /APPELLANT 4. . 6/ /CIT 2. *+() /RESPONDENT 5. 47 */ /DR 3. . 6/ ( )/CIT(A) 6. & 8 /GF