PROMETRIC TESTING PRIVATE LIMITED,GURGAON V. ACIT, CIRCLE-3(1), GURGAON

SA 245/DEL/2025

AI Insights

The case involves Prometric Testing Private Limited, which sought a stay on an outstanding tax demand related to the assessment year 2016-17. The company argued that the transfer pricing (TP) officer determined the arm's length price of their royalty payments to an associated enterprise at NIL without proper methods or data on comparable uncontrolled transactions. The Tribunal considered precedents from the Delhi High Court and the Supreme Court, which supported the assessee's position. The stay was granted based on the merits of the case and the adjustment of 20% of the demand from pending refunds was agreed upon to mitigate the financial impact on the assessee.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 47041 (ITAT-DELHI)
• Appeal Type: Stay Application
• Pronouncement Date: 11-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Assessment Year: 2016-2017
• Other Referred Cases: Lumax Industries Limited vs. CIT, CIT vs. Cushman and Wakefield (India) Pvt. Ltd., Magneti Marelli Powertrain India Pvt. Ltd. vs. 389 ITR 469 (Delhi), Sabic India Pvt. Ltd. SLP dismissed by Supreme Court
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DHEERAJ JAIN
• Keywords: Transfer pricing; Application of stay

Judgement Text

"1 IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH “FRIDAY-H” NEW DELHI ) BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI ANUBHAV SHARMA, JUDICIAL MEMBER Stay Application No. 245/Del/2025 (In ITA No. 1753/Del/2021) Asstt. Year : 2016-17 Prometric Testing Private Limited, VS. ACIT, CIRCLE-3(1), 2nd floor, DLF Infinity Tower-A, Gurgaon Sector-25, Gurugram Haryana-122001 Haryana-122002 (PAN: AACCP5202A) ( Applicant) ( Respondent ) Applicant by : Shri Neeraj Jain, Adv., & Ms. Mansha Bhalla, CA Respondent by : Shri Dheeraj Jain, Addl. CIT(DR) Date of Hearing 11.04.2025 Date of Pronouncement 11.04.2025 ORDER PER ANUBHAV SHARMA, JM This Stay Application is preferred by the assessee, seeking stay on the outstanding demand of Rs. 2,02,49,411/- in respect of the assessment year 2016-17. 2. At the time of hearing, Ld. AR has submitted that the applicant is engaged in providing computer based testing (CBT) and it has a long standing in the international market and over the years it has developed technology, proprietary methods and procedure for efficient running of operations. These proprietary methods are made 2 available by AEs to the group companies, including applicant, so as to enable them to leverage upon the methods and procedures developed centrally by the AEs. The entire business model of the assesse is based on the licenses, including the right to sue brand, granted by the associated enterprise. The royalty paid to the AE is connected to the business of the assesse. However, the TP determined arm’s length price at NIL applying the benefit test without applying any of the prescribed methods and without placing on record data w.r.t. comparable uncontrolled transactions. He submitted that this issue is covered by the series of judgements of the Hon’ble Delhi High Court viz. Lumax Industries Limited (ITA 102/2014); CIT vs. Cushman and Wakefield (India) Pvt. Ltd. (ITA 475/2012 and Magneti Marelli Powertrain india Pvt. Ltd. 389 ITR 469 (Delhi) and the SLP of the Revenue was dismissed by the Hon’ble Supreme Court in the case of Sabic India Pvt. Ltd. Ld. AR for the assessee further stated that stay may be granted in this case, subject to adjustment of 20% of the total outstanding demand, from the pending refund of assessment year 2013-14 of Rs. 15,28,260/-; Assessment year 2014-15 of Rs. 1,44,90,920/- and for AY 2015-16 of Rs. 32,37,900 (Advance Tax of Rs 11 lacs not considered) which roughly amounts to Rs. 2 crores, lying with the department, for which the assesse is pursuing with the department. It was informed that the corresponding appeal of the assessee is already fixed for hearing on 15.04.2025. Ld. DR did not have any serious objection to the aforesaid contention. 3. We have heard both the parties and perused the records. It is informed by the Ld. AR that the corresponding appeal is already listed for hearing on 15.04.2025. Keeping in view of the aforesaid peculiar facts and circumstances of the case, we are of the considered view that in the interest of justice, the assesse deserve stay on the outstanding demand in dispute. Accordingly, we are inclined to grant the stay on the disputed demand in dispute for a period of 180 days or till the disposal of the appeal of the assessee, whichever is earlier, from today. However, the AO is directed to adjust 3 the 20% of the total outstanding demand in dispute from the pending refund of the previous years lying with the department, as requested by the Ld. AR. 4. In the result, the Stay Application is allowed in the aforesaid manner. Order pronounced on 11TH April, 2025. SD/- SD/- (SHAMIM YAHYA) (ANUBHAV SHARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 11.04.2025 SR BHATNAGAR Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asstt. Registrar, ITAT, New Delhi "