M/s Goldman Sachs Services Private Limited , Bangalore V. Joint Commissioner of Income Tax Special Range-3 , Bangalore

SA 275/BANG/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 6117 (ITAT-BANGALORE)
• Duration Of Justice: 4 month(s) 28 day(s)
• Appeal Type: Income Tax (Transfer Pricing) Appeal
• Pronouncement Date: 01-05-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 04-12-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R N SIDDAPPAJJI
• Section: 143(3); 115JB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH B BEFORE SHRI N. V. VASUDEVAN, VICE PRESIDENT AND SHRI JASON P BOAZ, ACCOUNTANT MEMBER S.P. NO.275/BANG/2018 (IN IT(TP)A NO. 3244/BANG/2018) (ASSESSMENT YEAR : 2014-15) M/S. GOLDMAN SACHS SERVICES PRIVATE LIMITED, CRYSTAL DOWNS, EMBASSY GOLF LINKS BUSINESS PARK, OFF INTERMEDIATE ROAD, BANGALORE 560 071 . PETITIONER. VS. JT. COMMISSIONER OF INCOME TAX, SPECIAL RANGE 3, BANGALORE. .. RESPONDENT. PETITIONER BY : SHRI SHARATH RAO, CA. RESPONDENT BY : SHRI R. N. SIDDAPPAJJI, ADDL.CIT DATE OF HEARING : 04.01.2019. DATE OF PRONOUNCEMENT : 04.01.2019. O R D E R PER SHRI JASON P BOAZ, AM : THIS STAY PETITION (SP) FILED BY THE ASSESSEE IS IN RESPECT OF APPEAL IN ITA NO.3244/BANG/2018 FOR ASSESSMENT YEAR 2014-15 PENDING DISPOSAL BEFORE THE TRIBUNAL. 2 S.P. NO.275/BANG/2018 (IN IT(TP)A NO.3244/BANG/2018) 2. BRIEFLY STATED, THE FACTS RELEVANT FOR DISPOSAL OF THE STAY PETITION ARE AS UNDER: 2.1 THE ASSESSEE, A COMPANY ENGAGED IN THE BUSINESS OF SOFTWARE DEVELOPMENT AND EXPORT AND IT ENABLED SERVICES (ITES), FILED ITS RETURN OF INCOME FOR ASSESSMENT YEAR 2014-15 ON 29.11.2014 DECLARING TOTAL INCOME OF RS.399,78,38,220/- AND BOOK PROFITS UNDER SECTION 115JB AT RS.288,08,15,284/-. THE CASE WAS TAKEN UP FOR SCRUTINY AND THE FINAL ORDER OF ASSESSMENT WAS PASSED UNDER SECTION 143(3) R.W.S. 144C OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT), VIDE ORDER DATED 29.10.2018 WHEREIN THE ASSESSEES INCOME WAS DETERMINED AT RS.542,96,89,560/- IN VIEW OF TP ADJUSTMENTS UNDER SECTION 92CA OF THE ACT, DISALLOWANCES UNDER SECTION 43B, 40(A)(I)(IA), ETC. AS PER THE DETAILS ON RECORD, THE TOTAL DEMAND RAISED AND OUTSTANDING IN THE CASE ON HAND FOR THE ASSESSMENT YEAR 2014-15 IS RS.107,80,72,470/- (COMPRISING OF TAX OF RS.69,54,77,298/- AND INTEREST OF RS.38,25,95,173/-). 3 S.P. NO.275/BANG/2018 (IN IT(TP)A NO.3244/BANG/2018) 3. BEFORE US, THE LEARNED AR OF THE ASSESSEE SUBMITTED THAT THOUGH THE APPLICATION FOR STAY ON RECOVERY OF THE ABOVE DEMAND WAS FILED BEFORE THE AO ON 22.11.2018, SO FAR, THE SAME HAS NOT BEEN DISPOSED OFF AND IT IS IN THIS CONTEXT THAT THE ASSESSEE HAS APPROACHED THE TRIBUNAL SEEKING STAY ON RECOVERY OF THE OUTSTANDING DEMAND. ACCORDING TO THE LEARNED AR, THE ASSESSEE IS CONFIDENT OF GETTING SUBSTANTIAL RELIEF ON MOST OF THE ISSUES RAISED IN THE APPEAL, ON WHICH ADDITIONS/DISALLOWANCES HAVE BEEN MADE, AS IT HAS A VERY GOOD CASE ON MERITS; ESPECIALLY WITH REGARD TO THE TP ADJUSTMENTS MADE UNDER SECTION 92CA(3) OF THE ACT. IT IS ALSO SUBMITTED THAT THE ASSESSEE IS UNDERTAKING SUBSTANTIAL BUSINESS EXPANSION AND CONSEQUENTLY HAS LARGE CAPITAL COMMITMENTS IN THIS REGARD AND THEREFORE IT WOULD BE PUT TO UNDUE HARDSHIP AND INCONVENIENCE IF DIRECTED TO MAKE THE PAYMENT OF THE OUTSTANDING DEMAND. IT WAS ALSO PRAYED THAT THE TRIBUNAL MAY KINDLY EXPEDITE HEARING OF THIS APPEAL SO THAT THE ISSUES IN DISPUTE CAN BE SETTLED AT THE EARLIEST. IN VIEW OF THE 4 S.P. NO.275/BANG/2018 (IN IT(TP)A NO.3244/BANG/2018) ABOVE, IT WAS PLEADED THAT THE TRIBUNAL MAY KINDLY GRANT STAY ON RECOVERY OF THE OUTSTANDING DEMAND TILL DISPOSAL OF THE APPEAL. 4. THE LEARNED DR FOR REVENUE EMPHATICALLY OBJECTED TO THE ASSESSEES REQUEST FOR GRANT OF STAY ON RECOVERY OF THE ENTIRE OUTSTANDING DEMAND. IT WAS PLEADED THAT THE ASSESSEE BE DIRECTED TO PAY THE ENTIRE DEMAND OUTSTANDING. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD. FROM THE DETAILS ON RECORD, IT IS APPARENT THAT THE ASSESSEE HAS NOT SO FAR PAID EVEN A SINGLE PENNY AGAINST THE OUTSTANDING DEMAND OF RS.107,80,72,470/- (COMPRISING OF TAX OF RS.69,54,77,298/- AND INTEREST OF RS.38,25,95,173/-). TAKING INTO ACCOUNT THE FACTS AND CIRCUMSTANCES OF THE CASE, THE FACT THAT THE ASSESSEE HAS NOT BEEN ABLE TO ESTABLISH BEFORE US ANY SORT OF FINANCIAL HARDSHIP AND THE BALANCE OF CONVENIENCE, WE ARE OF THE VIEW THAT THIS IS A FIT CASE FOR GRANT OF STAY ON RECOVERY OF DEMAND SUBJECT TO THE ASSESSEE PAYING ATLEAST 50% OF THE TAX DEMAND OF APPROX. RS.70 CRORES. WE GRANT 5 S.P. NO.275/BANG/2018 (IN IT(TP)A NO.3244/BANG/2018) STAY ON RECOVERY OF THE DEMAND OUTSTANDING FOR A PERIOD OF 6 MONTHS COMMENCING TODAY I.E., 04.01.2019, OR DISPOSAL OF APPEAL, WHICHEVER IS EARLIER; SUBJECT TO THE ASSESSEE PAYING AN AMOUNT OF RS. 35 CRORES I.E., APPROX. 50% OF THE TAX DEMAND (EXCLUDING INTEREST OF APPROX. 38 CRORES), IN THE FOLLOWING INSTALMENTS : 1. PAYMENT OF RS.15 CRORES OF TAX ON OR BEFORE 31.01.2019. 2. PAYMENT OF TAX OF RS.10 CRORES ON OR BEFORE 28.02.2019, AND 3. PAYMENT OF TAX OF RS.10 CRORES ON OR BEFORE 15.03.2019 (TOTAL RS.35 CRORES) 6. FAILURE ON THE PART OF THE ASSESSEE TO COMPLY WITH THE ABOVE DIRECTIONS WILL RESULT IN STAY BEING VACATED AUTOMATICALLY AND ALL OTHER LEGAL CONSEQUENCES SHALL FOLLOW. THE CASE IS FIXED FOR EARLY HEARING ON 26.03.2019. SINCE THE DATE OF HEARING HAS BEEN ANNOUNCED IN THE OPEN COURT IN THE PRESENCE OF BOTH THE PARTIES, NO NOTICE OF HEARING SHALL BE SEPARATELY ISSUED. 7. IN THE RESULT, THE ASSESSEES STAY PETITION FOR THE ASSESSMENT YEAR 2014-15 IS PARTLY ALLOWED. 6 S.P. NO.275/BANG/2018 (IN IT(TP)A NO.3244/BANG/2018) ORDER PRONOUNCED IN THE OPEN COURT ON 04.01.2019. SD/- (N. V. VASUDEVAN) VICE PRESIDENT SD/- (JASON P BOAZ) ACCOUNTANT MEMBER BANGALORE, DT. 04.01.2019. /NS/* COPY TO : 1 APPELLANT 4 CIT(A) 2 RESPONDENT 5 DR. ITAT, BANGALORE 3 CIT 6 GUARD FILE ASSISTANT REGISTRAR ITAT, BANGALORE