LX PANTOS INDIA PRIVATE LIMITED,DELHI V. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 13(1), DELHI, DELHI

SA 58/DEL/2025

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The case involves LX Pantos India Pvt. Ltd., which filed a stay application against an outstanding demand of income-tax and interest following an assessment order that significantly altered their reported loss into a substantial income. The primary contention revolves around the disallowance of certain expenditures for non-deduction of income-tax at source on payments made to non-residents for logistics services, which the assessee argued were not taxable in India. Additionally, there were transfer pricing adjustments related to international transactions with associated enterprises. The Tribunal considered previous rulings in favor of the assessee on similar issues and the adjustments made to the assessee's refunds for earlier years, leading to the decision to grant a partial stay on the demand.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 34454 (ITAT-DELHI)
• Appeal Type: Stay Application
• Pronouncement Date: 07-02-2025
• Appeal Filed By: Assessee
• Order Result: 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, ITAT, Delhi Benches, Delhi in assessee's own case for assessment years 2017-18 and 2018-19 in ITA No. 911 & 912/Del/2023 for AY 2017-18 & 2018-19
• Laws Referred To: Income-tax Act 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMIT KATOCH
• Assessee Lawyers: ASHIK SHAH
• Keywords: Transfer pricing; International transaction; Application of stay
• Section: 143(3); 195; 40(a)(ia)

Judgement Text

"P a g e | 1 SA No.58/del/2025 arising out of ITA no. 5913/Del/2024 LX Pantos India Pvt. Ltd. IN THE INCOME TAX APPELLATE TRIBUNAL “I” DELHI BENCHES BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENT & SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER S.A No. 58/Del/2025 Arising out of ITA No.5913/Del/2024 (Assessment Year 2021-22) LX Pantos India Pvt. Ltd. K-27, Ground Floor, Gali No.6, K Block, Labour Chowk, Mahipalpur, South West-110037, Delhi v. The DCIT, Circle 13(1) Delhi स्थायीलेखासं./जीआइआरसं./PAN/GIR No:AAACF8539L Appellant .. Respondent Appellant by : Sh. Ashik Shah, CA Respondent by : Sh. Amit Katoch, Sr.DR Date of Hearing 07.02.2025 Date of Pronouncement 07.02.2025 O R D E R PER RAMIT KOCHAR, AM: This Stay Application No.58/Del/2025 arising out of ITA No. 5913/Del/2024 for assessment year 2021-22 , filed by the assessee seeking stay of demand of outstanding demand of income-tax and interest of Rs.33,35,95,950/- which has arisen from the assessment P a g e | 2 SA No.58/del/2025 arising out of ITA no. 5913/Del/2024 LX Pantos India Pvt. Ltd. order passed, by the AO date 23.10.2024 under Section 143(3) r.w.s 144C(13) r.w.s 144B of the Income-tax , Act 1961 Act in pursuance of directions of learned DRP dated 19.09.2024 under Section 144C(5) of the Act. 2. At the outset, ld. Counsel for assessee submitted that assessee has challenged all the additions to the tune of Rs.96,13,59,470/- made by the AO to the income of the assessee, wherein the returned loss of Rs.4,50,03,134/- has been converted into the income of Rs.91,63,56,340/-, and total demand of Rs.33,35,95,950/- towards income-tax and interest was raised by the AO. It was submitted that all the three additions as were made by the AO aggregating to the tune of Rs. 96,13,59,470/- have been contested by the assessee before the Tribunal. It was further submitted by ld. Counsel for the assessee that the addition of RS.87.75 crores were made on account of disallowance of expenditure for non deduction of income-tax at source u/s 195 on the payments made to Non-Residents on account of shipment , clearing and forwarding services charges, keeping in view provision of Section 40(a)(ia) of the Act. As per assessee, the payments made to overseas logistic companies are not chargeable to income-tax. But, as per AO, assessee had availed advisory and freight forwarding services from overseas logistic companies without withholding of income-tax at source, and are characterized as fee for technical services. It was submitted that this issue of payments made by the assessee to Non-Residents overseas logistic companies towards shipment , clearing and freight forwarding services are covered by the decision of ITAT, Delhi Benches, Delhi in assessee’s own case for assessment years 2017-18 and 2018-19 in favour of the assessee in ITA No. 911 & 912/Del/2023 for AY 2017-18 & 2018-19, vide order dated 17.05.2024 where the Tribunal has held in P a g e | 3 SA No.58/del/2025 arising out of ITA no. 5913/Del/2024 LX Pantos India Pvt. Ltd. faovur of the assessee and the appeal filed by the Revenue has been dismissed by the Tribunal on this issue. Thus, prayers were made that the stay of demand may be granted in favour of the assessee. It was further submitted that so far as the TP adjustment of Rs.8,08,85,562/- being made on account of ALP determination of international transaction with AE towards provision of and receipt of freight and forwarding services. It was submitted the similar issue came up before TPO in assessment year 2012-13 and no additions were made . It was further submitted that the refund of AY 2022-23 has been adjusted with the non existing demand for AY2018-19 on 25.01.2024. Similarly refund for AY 2023-24 has been adjusted with non existing demand for AY 2018-19. The ITAT had dismissed the appeal filed by the Revenue for ay:2018-19 and hence there was no demand payable by the assessee for the said year l. It was further submitted that department has quantified refund for AY 2024-25 which is due to the assessee. It was submitted that appeal effect owing to ITAT order dated 17.05.2024 for assessment year 2017-18 and 2018-19 has not been granted by the AO . 3. The ld. Sr. DR fairly submitted that matter can be considered by the Bench as may deem fit. 4. After hearing both the parties and perusing the material on record, we have observed that the assessee has made out a prima facie case for grant of partial stay of outstanding demand keeping in view provisions of Section 254(2A), wherein directions are issued by us to the AO to recover Rs. 500 lacs (Rs. Five Crores) from the refund due to the assessee for earlier years and adjust it against the outstanding demand payable by the assessee for the year under consideration. The AO shall give appeal effect for earlier years as P a g e | 4 SA No.58/del/2025 arising out of ITA no. 5913/Del/2024 LX Pantos India Pvt. Ltd. also determine the refund due and payable to the assessee, and shall recover Rs. 500 lacs (Rs. Five Crores) against the outstanding demand of the current year from the said refund due and payable to the assessee. The balance amount be refunded to the assessee. Thus, without commenting on the merits of the issue involved in the appeal, we direct the assessee to deposit an amount of Rs.500 lacs against the outstanding demand of tax and interest with Government , which shall be by way of adjustment by the AO against the amount of the refund due and payable to the assessee for earlier years(after necessary verifications), as detailed above. With the recovery of the aforesaid amount of Rs. 500 lacs, the balance outstanding demand of tax and interest for the impugned assessment year shall stand stayed for a period of 180 days or till the disposal of the appeal in ITA No.5913/Del/2024 for Asst. Year 2021-22 , whichever is earlier. 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. We once again clarify that we have not commented on the merits of the issue. Further, that the assessee will fully co- operate in speedy disposal of the appeal by ITAT, and the assessee will not seek any un-necessary adjournments before the Tribunal in the appellate proceedings in ITA No. 5913/Del/2024. On breach of aforesaid conditions, the stay shall stand vacated . The appeal of the assessee in ITA no. 5913/Del/2024 for assessment year 2021- 22 is now coming up for hearing before “I’ Bench, Delhi on P a g e | 5 SA No.58/del/2025 arising out of ITA no. 5913/Del/2024 LX Pantos India Pvt. Ltd. 16.04.2025. The terms of stay of demand were announced by Division Bench during the course of hearing of stay application in open Court. We order accordingly. 5. In the result, Stay Application is allowed in the manner as indicated above. Order pronounced in the open court on 07.02.2025 Sd/- Sd/- (Mahavir Singh) (Ramit Kochar ) VICE PRESIDENT ACCOUNTANT MEMBER Dated: 07.02.2025 PS: Rohit Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT DELHI P a g e | 6 SA No.58/del/2025 arising out of ITA no. 5913/Del/2024 LX Pantos India Pvt. Ltd. "