INCOME TAX ACT, 1961

Section 220

Recovery of tax - Stay of demand - Assessee had already paid 20% of demand -

Assessee's main object of designing, financing, constructing and operating aviation fuel facility and providing into -- Plane Refuelling Services. It filed application for stay against outstanding demand arose out of disallowance of deduction under section 80-IA and interest on hedging transaction. Assessee pointed out that it had already paid 20% of outstanding demand. He pointed out that due to breakdown of COVID-19 pandemic, the aviation industry had come to a standstill and consequently there was a huge fall in demand for aviation fuel, which has adversely impacted the assessee resulting in a sharp decline in the revenue. Assessee had thus pointed out the existence of undue financial hardship and inconvenience if the assessee was asked to pay the remaining part of the outstanding demand. Held: Assessee made out a prima facie case inasmuch as the issue of deduction under section 80-IA sought to be raised in the appeal was identical to the issue considered and decided in favour of the assessee in the case of Menzies Aviation Bobba Pvt. Ltd. [ITA No.1160/Bang/2012 : 2015 TaxPub(DT) 4372 (Bang-Trib)]. On the issue of disallowance of interest on hedging swap transaction, there appears to be a prima facie case inasmuch as there was no capital expenditure debited to the Profit & Loss account for assessment year 2017-18 and asset was put to use as early as in 2008. Considering the payments already made by assessee and taking note of the financial hardship pointed, there should be a stay of recovery of balance outstanding demand from the date of this order, or till the disposal of the appeal; whichever is earlier.

Followed:ACIT v. Menzies Aviation Bobba (Bangalore) Pvt. Ltd. & Vica-Versa [ITA No.1160/Bang/2012] : 2015 TaxPub(DT) 4372 (Bang-Trib)

REFERRED :

FAVOUR : In assessee's favour

A.Y. :

SUBSCRIBE FOR FULL CONTENT

OR Try Reload the Page