MEDINNOVA SYSTEMS PRIVATE LIMITED,SURAT V. DCIT CIRCLE 2(1)(2), SURAT

SA 8/SRT/2024

AI Insights

The case involves Medinnova Systems Pvt. Ltd., which sought a stay on the recovery of an outstanding tax demand for the Assessment Year 2012-13. The demand was based on disallowed purchases from a supplier, Bristol Med Wholesale, a USA-based entity, which the Assessing Officer questioned. The Tribunal considered the submissions from both the assessee and the Revenue, including the payment history and the verification of the supplier's genuineness. The Tribunal's decision to grant a stay was influenced by the assessee's compliance with the statutory payment requirement and the potential prejudice the assessee would face if recovery actions were initiated.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 470558 (ITAT-SURAT)
• Duration Of Justice: 11 day(s)
• Appeal Type: Others
• Pronouncement Date: 06-12-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 06-12-2024
• Assessment Year: 2012-2013
• Appeal Filed On: 25-11-2024
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MUKESH JAIN
• Assessee Lawyers: HIREN R.VEPARI
• Keywords: Competent authority; Recovery proceedings

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER Stay No.08/SRT/2024 (AY 2012-13) (arising out of ITA No.1241/SRT/2024) (Hearing in Physical Court) Medinnova Systems Pvt. Ltd., (previously known as ‘Soma tech. Pvt. Ltd.) 301, Soham House, Opp. St Xavier’s School, Ghod Dod Road, Surat-395 007. [PAN No. AAKCS 5265 N] Vs Deputy Commissioner of Income- tax, Circle-2(1)(2), Surat (current jurisdiction Ward-2(1)(1), Vadodara, Aayakar Bhavan, Race Course Circle, Vadodara-390 007 Applicant / Assessee Respondent /Revenue िनधाŊįरती की ओर से /Assessee by Shri Hiren R. Vepari, C.A. राजˢ की ओर से /Revenue by Shri Mukesh Jain, Sr.DR सुनवाई की तारीख/Date of hearing 06/12/2024 उद ्घोषणा की तारीख/Date of pronouncement 06/12/2024 Stay Order under section 254 (2A) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER: 1. This stay petition is filed by assessee for seeking stay on recovery of outstanding demand for the Assessment Year (AY) 2012-13. The learned Authorised Representative (ld. AR) of the assessee submits that there is total outstanding demand of Rs. 2,23,93,859/-, out of which assessee has already paid of Rs.63,60,698/-. Copy of 26AS for assessment year 2012-13 is placed on record. The Ld. AR of assessee submits that the has paid more than 22% of total demand. The Ld. AR of the assessee submits that Assessing Officer made addition by disallowing the opening balance of purchase from supplier and made SA No.08/SRT/2024(a/o ITA No.1241/SRT/2024 Medinnova Systems Pvt. Ltd 2 addition of Rs.4.37 crores. However, during the year under consideration, the assessee has made purchase of Rs.1.72 crores only. The Ld. AR of the assessee submits that at the worst if at all, the addition is to be made it cannot be exceeded more than Rs.1.72 crores though, even such addition is not liable to be sustained. The Ld. AR of the assessee submits that to substantiate the purchase, the assessee furnished complete details of supplier, payments were made through banking channel to Bristol Med Wholesale, which is USA based entity. The Ld. AR of the assessee submits that assessee has good prima facie case on merit and is liable to succeed as and when the appeal will be heard on merit, balance of convenience is also in favour of assessee and the assessee will suffers prejudice if, in face Assessing Officer starts the recovery proceedings. The assessee apprehends that Assessing Officer may attach the bank account. The Ld. AR of the assessee submits that outstanding demand may be stayed for a period of six months or till the disposal of appeal. The Ld. AR of the assessee submits that assessee has filed appeal on 25.11.2024 and date of hearing of appeal is not yet fixed by the Registry. The ld AR for the assessee prayed for fixing the date of hearing on out of turn basis. He undertakes to file all relevant documents and submission to substantiate the ground of appeal raised in the main appeal. 2. On the other hand, Ld. Senior Departmental Representative (DR) for the Revenue submits that Assessing Officer made addition in the assessment order with sound reasoning after making proper verification of fact. The Assessing Officer in order to examine the genuineness of transaction with USA based entity SA No.08/SRT/2024(a/o ITA No.1241/SRT/2024 Medinnova Systems Pvt. Ltd 3 made a reference to the FT & TR Exchange of information at New Delhi. Information was received from competent authority USA on 28.03.2017 informing that they did not find any evidence about the entity Bristol Med Wholesale in their data base. On the basis of aforesaid submission, Ld. Sr-DR for the Revenue submits that assessee has no case on merit, therefore, outstanding demand may not be stayed. However, on fixing the date of hearing on out of turn basis, Bench as per the precedents and Tribunals Rules. 3. We have considered the rival submissions of both the parties and perused the records carefully. We find that assessee has already made payment of more than 22% of outstanding demand as on today (06.12.2024). Therefore, the assessee has fulfilled the condition of First Proviso to Section 254(2A) for seeking stay of demand from Tribunal. Admittedly, assessee has paid more than 22% of outstanding demand. Thus, considering the prayer of Ld. AR of the assessee, remaining outstanding demand for AY 2012-13 is stayed for a period of six months or till the disposal of appeal, whichever is earlier. This order was dictated in open Court in the presence of both parties. 4. The prayer of Ld. AR of the assessee for fixing the date of hearing in main appeal on out of turn basis is also accepted for early disposal of appeal. The date of hearing is fixed on 15.01.2025, issuance of separate notice to the parties is dispense with as date of hearing is given with the consent of both the parties. 5. The Ld. AR for the assessee is further directed to file documents, if any, if so desire, 7 days before the date of hearing, with advance copy thereof to the SA No.08/SRT/2024(a/o ITA No.1241/SRT/2024 Medinnova Systems Pvt. Ltd 4 officer of Ld DR of Revenue. With this direction, the stay petition of assessee is allowed, copy of this order be supplied to both the parties, if so desire. 6. In the result, stay petition filed by the assessee is allowed. Order pronounced on 06/12/2024 at the time of hearing. S Sd/- Sd/- (BIJAYANANDA PRUSETH) (PAWAN SINGH) लेखा सद˟/Accountant Member Ɋाियक सद˟/Judicial Member सूरत / Surat Dated: 06/12/2024 Dkp Outsourcing Sr.P.S* आदेश की Ůितिलिप अŤेिषत/ Copy of the order forwarded to :  अपीलाथŎ/ The Appellant  ŮȑथŎ/ The Respondent  आयकर आयुƅ/ CIT  िवभागीय Ůितिनिध, आयकर अपीलीय आिधकरण, सूरत/ DR, ITAT, SURAT  गाडŊ फाईल/ Guard File // True Copy // By order/आदेश से, सहायक पंजीकार आयकर अपीलीय अिधकरण, सूरत "