SUMITOMO CORPORATION INDIA PVT LTD,DELHI V. ASSESSMENT UNIT, DELHI

SA 360/DEL/2025

AI Insights

The case involves Sumitomo Corporation India Pvt. Ltd., which filed a stay application (S.A. No. 360/Del/2025) against an outstanding demand of Rs. 78,61,290 arising from an assessment order for the assessment year 2020-21. The demand was based on transfer pricing adjustments and interest on delayed receipt of trade receivables, as directed by the Dispute Resolution Panel (DRP). The assessee contested the non-allowance of working capital adjustments, which had been consistently allowed in previous years. The Departmental Representative argued that the assessee should deposit the entire outstanding demand. The Tribunal, after hearing both parties, decided to grant a partial stay, requiring a deposit of 20% of the demand and scheduled the main appeal for a hearing on September 17, 2025.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 711606 (ITAT-DELHI)
• Appeal Type: Stay Application
• Pronouncement Date: 25-07-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Assessment Year: 2020-2021
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Application of stay
• Section: 143(3); 2

Judgement Text

"1 SA No. 360/Del/2025 (In ITA No. 4400/Del/2025) A.Y. 2020-21 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “I”: NEW DELHI BEFORE SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER AND SHRI SUDHIR KUMAR, JUDICIAL MEMBER S.A. No. 360/Del/2025 ( In ITA No. 4400/DEL/2025) AssttYr: 2020-21 Sumitomo Corporation India Pvt. Ltd., 501 & 502, 5th Floor, West Wing, World Mark 1, Asset No. 11, Hospitality District Aerocity, New Delhi-110037. PAN- AABCS1887M v. Assessment Unit, National Faceless Assessment Centre, Delhi. APPLICANT RESPONDENT Assessee represented by Shri Himanshu S. Sinha, Adv. (Virtual); Shri Prashant Meharchandani, Adv. & Shri Jainender Kataria, Adv. (Virtual). Department represented by Ms. Neeju Gupta, Sr. DR Date of hearing 25.07.2025 Date of pronouncement 25.07.2025 O R D E R PER RAMIT KOCHAR, AM: This stay application bearing S.A. no. 360/Del/2025 arising out of ITA No. 4400/Del/2025 for A.Y. 2020-21, has been filed by the assessee seeking stay on the recovery of the outstanding demand of Rs. 78,61,290/- which is stated to have been arisen from the assessment order dated 20.06.2025 u/s 143(3) read with section 144C(13) read with section 144B of the Income-tax Act,1961 [DIN: Printed from counselvise.com 2 SA No. 360/Del/2025 (In ITA No. 4400/Del/2025) A.Y. 2020-21 ITBA/AST/S/143(3)/2025-26/1077268522(1)], wherein the additions were made to the income of the assessee to the tune of Rs. 1,43,44,133/- on account of variation in respect of TP adjustment wherein income was assessed at Rs. 31,71,47,593/- asagainst returned income of Rs. 30,28,03,460/-. The Ld. Counsel for the assessee submitted that TNMM adjustments were made to the income of the assessee by the AO to the tune of Rs. 1,40,25,260/- , and TP addition of Rs. 3,18,873/- was made to the income of the assessee by the AO on account of interest on delayed receipt of outstanding trade receivables ,in pursuance of the direction of the ld. DRP dated 28.05.2024. It was submitted that while making TP adjustment by applying TNMM method ,the working capital adjustment has not been allowed to the assessee which has been consistently allowed in preceding years . It was stated before the Bench that ld. DRP allowed working capital adjustment for assessment year 2015-16, 2016-17 and 2017-18 in assessee’s own case. It was submitted that if the working capital adjustment is allowed then in that case assessee’s margin of profit will be in the range of arm’s length, and no addition could have been made by the Revenue. 2. Ld. Sr. DR on the other hand submitted that assessee is arguing on the merit at this stage,while these matters can be argued by the assessee during the course of hearing before the Tribunal. Ld. Sr DR submitted that the assessee be directed to deposit entire outstanding demand. 3. After hearing both the parties and without commenting on the merits of the issue in the appeal, we observe that the assessee has made out a prima facie case for grant of partial stay on recovery of the outstanding demand with the condition that the assessee deposits 20% of the outstanding demand of Rs. 78,61,290/-. The assessee is directed to deposit Rs. 16,00,000/-(rounded off) with Government Printed from counselvise.com 3 SA No. 360/Del/2025 (In ITA No. 4400/Del/2025) A.Y. 2020-21 Treasury within next 15 days from today, and we direct listing of the appeal of the assessee in ITA No. 4400/Del/2025 before the Division Bench on 17.09.2025. The date is announced in the Open Court, and issue of notice to both the parties is dispensed with. The stay on recovery of the remaining outstanding demand is granted for a period of 180 days or till disposal of the assessee, whichever is earlier, subject to the condition to pre-deposit Rs. 16,00,000/- by the assessee in Government Treasury as indicated above. Needless to say that the assessee will not seek un-necessary adjournments, and will co-operate in early disposal of the appeal in ITA No. 4400/Del/2025 for assessment year 2020-21. The appeal in ITA no. 4400/Del/2025 is now listed for hearing on 17th September, 2025. We clarify and reiterate that we have not commented on the merits of the issues arising in the appeal. We order accordingly. 4. Thus, the assessee’s stay application in SA No. 360/Del/2025 arising out of ITA no.4400/Del/2025 for assessment year 2020-21 is partly allowed, in the manner indicated above. Order pronounced after concluding hearing in open court on 25.07.2025. Sd/- Sd/- (SUDHIR KUMAR ) (RAMIT KOCHAR) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 29.07.2025. *MP* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals)/DRP 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI Printed from counselvise.com "