M/s Novozymes South Asia Pvt Ltd , Bangalore V. Deputy Commissioner of Income Tax, Circle-5(1)(2), Bangalore

SA 116/BANG/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 5956 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 1 month(s) 5 day(s)
• Appeal Type: Income Tax (Transfer Pricing) Appeal
• Pronouncement Date: 01-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 27-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B R RAMESH JT BENGALURU
• Assessee Lawyers: T SURYANARAYANA
• Keywords: Depreciation; Application of stay; Reasonable cause
• Section: 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER S.P. NOS.116 TO 118/BANG/2018 [IN IT (TP) A NO S . 893 TO 895/BANG/2018] ASSESSMENT YEAR S : 2011 - 12 TO 2013 - 14 NOVOZYMES SOUTH ASIA PRIVATE LTD., PLOT NO.32, 47-50, GENISYS BUILDING, EPIP AREA, WHITEFIELD, BANGALORE 560 066. PAN: AAACN 7030Q VS. THE JT.CIT (OSD), CIRCLE 5(1)(1), & THE DY.CIT / ACIT, CIRCLE 5(1)(2)/5(1)(1), BANGALORE. APP LIC ANT RESPONDENT A PPELLANT BY : SHRI T. SURYANARAYANA, ADVOCATE RE SPONDENT BY : SHRI B.R. RAMESH, JT. CIT(DR)(ITAT), BENGALURU. DATE OF HEARING : 13 . 0 4 .201 8 DATE OF PRONOUNCEMENT : 13 . 0 4 .201 8 O R D E R PER INTURI RAMA RAO, ACCOUNTANT MEMBER THESE ARE STAY PETITIONS FILED BY THE ASSESSEE S EEKING STAY OF DEMAND OF RS.16,68,45,644 FOR THE AY 2011-12, RS.8, 80,04,131 FOR THE AY 2012-13 & RS.6,60,74,360 FOR THE AY 2013-14 RESPECT IVELY. 2. IT IS SUBMITTED THAT THE DEMAND IN QUESTION HAS ARISEN ON ACCOUNT OF ADDITION ON ACCOUNT OF TP ADJUSTMENTS AND ON ACCOUN T OF ADDITION OF CORPORATE ISSUES LIKE DISALLOWANCE OF DEPRECIATION, ON GOODWILL AND SP NOS.116 TO 118/BANG/2018 PAGE 2 OF 4 INTANGIBLES, DISALLOWANCE OF EXPENDITURE INCURRED O N ESOP. IT IS SUBMITTED THAT IN RESPECT OF ADDITION OF TP ADJUSTMENT, THE A SSESSEE COMPANY HAD INVOKED MAP MECHANISM AND APPLICATION IS PENDING DI SPOSAL AND FOR THE DEMAND ATTRIBUTABLE TO THE TP ADDITIONS, THE ASSESS EE COMPANY HAD ALREADY SUBMITTED BANK GUARANTEE PURSUANT TO THE CI RCULAR ISSUED BY THE CBDT. THE DEMAND ATTRIBUTABLE TO THE ADDITIONS ON ACCOUNT OF CORPORATE ISSUES IS ONLY RS.15,58,64,64,769 FOR THE AY 2011-1 2, RS.6,08,69,050 FOR THE AY 2012-13 AND RS.4,76,37,608 FOR THE AY 2013-1 4. 3. IT IS SUBMITTED THAT AS REGARDS THE ISSUE OF DEP RECIATION, ON GOODWILL AND INTANGIBLES, THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE COMPANY BY THE DECISION OF THE HONBLE SUPREME COURT IN THE CA SE OF CIT V. SMIFFS SECURITIES LTD., 348 ITR 302 AND THE DISALLOWANCE OF EXPENDITURE INCURRED ON ESOP ALSO IS COVERED IN FAVOUR OF THE ASSESSEE B Y THE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF BIOCON RESEARCH LTD. 4. THUS, ACCORDING TO THE ASSESSEE, THERE IS A STRO NG PRIMA FACIE CASE IN FAVOUR OF THE ASSESSEE COMPANY ON THE MERITS OF THE ADDITIONS MADE BY THE AO. THEREFORE, IT WAS SUBMITTED THAT BALANCE OF DEMAND MAY BE STAYED. 5. THE LD. DR OPPOSED THE STAY PETITIONS. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. AFTER HEARING THE RIVAL SUBMISSIONS, WE AR E OF THE CONSIDERED SP NOS.116 TO 118/BANG/2018 PAGE 3 OF 4 OPINION THAT IT IS A FIT CASE FOR GRANT OF STAY FOR A PERIOD OF SIX MONTHS FROM THE DATE OF THIS ORDER, SUBJECT TO PAYMENT OF RS.8 CRORES ON OR BEFORE 30 TH APRIL, 2018 AND FURTHER WE DIRECT THE REGISTRY TO P OST THE CASE FOR HEARING ON 04.06.2018 ON WHICH DATE THE ASSESSEE COMPANY SHALL NOT SEEK ADJOURNMENT FROM HEARING OF THE APPEALS WITHOUT ANY JUST AND REASONABLE CAUSE. IF THE ASSESSEE SEEKS ADJOURNMENT OF THE CA SES WITHOUT ANY JUST AND REASONABLE CAUSE, THE STAY GRANTED BY THIS STAY ORDER CEASES TO OPERATE. 7. IN THE RESULT, THE STAY PETITIONS ARE DISPOSED O F AS ABOVE. PRONOUNCED IN THE OPEN COURT ON THIS 13 TH DAY OF APRIL, 2018. SD/- SD/- ( SUNIL KUMAR YADAV ) ( INTURI RAMA RAO ) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 13 TH APRIL, 2018. / D ESAI S MURTHY / SP NOS.116 TO 118/BANG/2018 PAGE 4 OF 4 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY ITAT, BANGALORE.