PER HARI OM MARATHA, JUDICIAL MEMBER: Through this stay petition, the assessee has sought stayal of the total outstanding demand of ` 3,40,01,700/-.
2. It was argued that the assessee, an Indian Company, is engaged in the business of rendering software development services to both its Associated Enterprises(AEs) and Non-AEs. The assessee filed its return of income declaring total income of ` 30,04,560/- after claiming a deduction of ` 5,19,83,600/- under section 10B of the Act. The matter was referred to Transfer Pricing Officer (TPO) u/s 92CA of S.P 84/11 :- 2 -: the Act for determining Arms Length Price(ALP). During the year under consideration, the assessee had provided software development services to its AEs to the tune of ` 26.62 crores by adopting Transactional Net Margin Method (TNMM) as the most appropriate method because data was available to enable the assessee to compute the net margins for services rendered to AEs as well as non-AEs. However, the TPO rejected the transfer pricing analysis done by the assessee and did his fresh analysis based on 28 companies as comparables and made the TP adjustment of ` 5,84,00,000/-. The Assessing Officer, while passing the draft assessment order in terms of section 144C by reducing the expenditure incurred in foreign currency without reducing the same from the total turnover, reduced the deduction u/s 10B by ` 72,55,012/-. He further disallowed a sum of ` 3,21,814/- u/s 14A of the Act, inter alia. It was argued that a prima- facie case for grant of unconditional stay is made out. It was submitted that balance of convenience is in favour of the assessee. This submission was rebutted by the ld.DR vehemently by making stringent argument stating that a case of grant of unconditional stay is not at all made out.
3. After weighing the pros and cons of the issue involved in the appeal, despite the fact that a prima-facie case is made out in favour of the applicant, it would be prudent and also fair, in the given facts S.P 84/11 :- 3 -: and circumstances of the case, if the assessee pays ` 50 lakhs (Rupees Fifty lakhs only) out of the total demand, in two equal instalments. In that event, a conditional stay can be granted as per the provisions of the Act. Accordingly, a conditional stay, subject to payment of `
50 lakhs in two instalments first instalment of `.25 lakhs(Rupees Twentyfive lakhs only) to be paid by 15th December 2011 and second instalment of ` 25 lakhs (Rupees Twentyfive lakhs only) to be paid by 15th Januay 2012, is granted in favour of the assessee and against the Revenue. The stay shall be valid upto 180 days from the receipt of this order, or upto the disposal of the appeal, whichever is earlier. However, it is made clear that on the date of hearing of appeal i.e 1.2.2012, which is already fixed, the assessee shall not venture to seek adjournment on flimsy grounds. The conditions so laid have to be adhered to as directed. Any deviation therefrom would have its consequential effect.
4. In the result, the stay petition stands allowed. Order pronounced in the open court on 25.11.2011 Sd/- Sd/- (ABRAHAM P GEORGE) ACCOUNTANT MEMBER ( HARI OM MARATHA ) JUDICIAL MEMBER Dated: 25th November, 2011 Copy to: Petitioner/Respondent/CIT(A)/CIT/DR