OSG MINERALS PVT LTD,UTTAR PRADESH V. ASSESSMENT UNIT, DCIT, CIRCLE -5(2)(1), NOIDA

SA 539/DEL/2024

AI Insights

OSG Minerals Pvt. Ltd. filed a stay application against an outstanding demand of Rs.2,22,12,340 for the assessment year 2021-22. The dispute arose from the Income Tax Department's failure to adhere to the Dispute Resolution Panel's (DRP) directions regarding the adjustment of working capital in international transactions involving the import of minerals. The assessee argued that the Transfer Pricing Officer (TPO) incorrectly applied a 5.18% margin instead of the 2.35% margin adjusted for working capital as per the DRP's directions. The tribunal found a prima-facie case in favor of the assessee and proposed a settlement where the assessee would pay Rs.30 lacs to stay the remaining demand.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 474566 (ITAT-DELHI)
• Appeal Type: Stay Application
• Pronouncement Date: 03-01-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: I
• Assessment Year: 2021-2022
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: BHOGENDRA PRASAD
• Assessee Lawyers: AJAY VOHRA; SENIOR; RICHA AGGARAL
• Keywords: Transfer pricing; International transaction; Application of stay

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: ‘I’ NEW DELHI BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENT AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER S.A. No.539/Del/2024 [Arising out of ITA No.5602/Del/2024] Assessment Year: 2021-22 OSG Minerals Pvt. Ltd. C-25, Amigo, Sector-8, Udhyog Marg, Gautam Budhha Nagar, Uttar Pradesh-201301 Vs. Assessment Unit, Income Tax Department [JAO-DCIT, Cirlce-5(2)(1) Noida. PAN: AASCA5565F (Appellant) (Respondent) ORDER PER MAHAVIR SINGH, VP: By way of this Stay Application, the assessee has requested for stay of outstanding demand of Rs.2,22,12,340/-. 2. The Learned Counsel for the assessee, Sh. Ajay Vohra brought to our notice that AO has not followed the directions of the Dispute Resolution Panel (DRP) in regard to international transactions of import of minerals and has not allowed working Assessee by Shri Ajay Vohra, Senior Advocate & Ms. Richa Aggaral, CA Department by Sh. Bhogendra Prasad, Sr. DR Date of hearing 03.01.2025 Date of pronouncement 03.01.2025 S.A.No.539/Del/2024 2 | P a g e capital adjustment. He pointed out that the margin as taken by the TPO (OP/OR) margin at 5.18% as against working capital adjusted margin at 2.35%, as per directions of the DRP. He specifically pointed out that the DRP direction at page 9 is as under:- “The company is involved in trading of business of agri-products. The TPO is directed to include this comparable if the segmental data in respect of the transaction sought to be benchmarked is available.” For another issue, the directions of the DRP was also not followed which read as under:- “KPL Exports Ltd is involved in import and export of multiple products including agro based products, construction materials mineral ore, electronics and computer items etc. while the assessee is only involved in the import segment of coal/manganese ore only. FAR is dissimilar. Hence, it is not a good comparable.” As assessee has made a prima-facia case and he has given the computation, in case this direction of the DRP is followed, the remaining demand is only to the extent of Rs.1,20,31,172/- as against computed by the AO vide final assessment order at Rs.2,22,12,340/-. Hence, he offered that assessee is ready to pay a sum of Rs.25 lacs. When this fact was confronted to the Ld. Sr. DR, he could not controvert the above factual position. 3. After going through the facts and circumstances of the case, we noted that the assessee could make a prima-facia case in its favour on part of the demands and for part of the demands, the assessee is ready to pay a sum equivalent to 20% and offered the sum of Rs. 25 lacs, we feel that in the interest of justice, if assessee pays Rs.30 lacs, the balance demand can be stayed. Hence, we direct the assesse to pay a sum of Rs.30 lacs on or before 10th S.A.No.539/Del/2024 3 | P a g e January, 2025 and balance demand is stayed. Appeal will come up for hearing on 14th January, 2025. 4. In the result, stay application is partly allowed. Order pronounced in the open court on 3rd January, 2025. Sd/- Sd/- (S. RIFAUR RAHMAN) (MAHAVIR SINGH) ACCOUNTANT MEMBER VICE PRESIDENT/- Dated: 3rd January, 2025. PK/Sps Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar ITAT, New Delhi "