Safilo India P.Ltd , vs Assessee

ी संजय अरोड़ा, लेखा सद य एवं ी वजय पाल राव, या यक सद य के सम । BEFORE SHRI SANJAY ARORA, AM AND SHRI VIJAY PAL RAO, JM रोक आवेदन सं./S.A. No. 42/Mum/2015 (Arising out of ITA No. 588/Mum/2015) ( नधा रण वष / Assessment Year: 2010-11) Safilo India Private Limited Dy. CIT - 15(3)(2), 1201/02/03, Meridian Business Centre, Mumbai बनाम/ Plot No. 27, Sector 30A, Opp. Sanpada Railway Station, Vashi, Vs. Navi Mumbai-400 705 थायी ले खा सं . /जीआइआर सं . /PAN/GIR No. (Applicant) : (Respondent) Applicant by : Shri Niraj Sheth Respondent by : Shri Akhilendra P. Yadav

ु वाई क$ तार&ख / सन : 20.02.2015 Date of Hearing Date of Order : 24.02.2015 आदे श / O R D E R Per Sanjay Arora, A. M.:

This is a stay petition by the Assessee praying for stay of demand in respect of the assessee's assessment u/s.143(3) r/w s. 144C of the Income Tax Act, 1961 ('the Act' hereinafter) for the assessment year (A.Y.) 2010-11, the captioned appeal in respect of which stands filed with the Tribunal on 28.01.2015.

2.1 As explained by the ld. Authorized Representative (AR), the principal issue involved in the instant appeal, which has a tax implication of about Rs.2.50 crores, is on account of the write off of the stock for Rs.6.48 crs. The same, representing an abnormal adjustment in the assessee's accounts, was accordingly added back while benchmarking its profits for the year with other comparables. The same was not accepted by the Revenue, even though the genuineness of the write off; the assessee's accounts being 2 SA No. 42/Mum/2015 (A.Y 2010-11) Safilo India Private Limited vs. Dy. CIT

duly audited, is not in doubt. Financial constraint was also emphasized with reference to the bank account disclosing a credit balance of Rs.48.58 lacs as on 18.02.2015.

2.2 The ld. Departmental Representative (DR) would object, stating that the write off, though stated to be of the obsolete stock accumulated over a period of five years, would yet have to bear a proportionate charge for the current year. Two, the assessee has already gained by reporting a 'higher' profit for the earlier years by not making a proper charge, i.e., in respect of stock obsolescence, in the accounts for the preceding five years. As regards financial hardship, the assessee has not made out any case in-as-much as the bank statement by itself is not indicative of the financial capacity or the resources available with the firm.

3. We have heard the parties, and perused the material on record. In our view, what is required at this stage is the balance of convenience. In our understanding, the same appears to be in favour of the assessee inasmuch as if the write off is not doubted, the same is only qua that accumulated over a period and, thus, apparently represents a charge for more than one year. The same is, we may qualify, a prima facie view. We, accordingly, consider it fit and proper to grant stay for a period of six months or the disposal of the appeal by the tribunal, whichever is earlier, subject to the payment of Rs.85 lacs, which is to be deposited in two installments, i.e., of Rs.50 lacs by 15.03.2015 and Rs.35 lacs by 15.04.2015. Further, the assessee shall seek adjournment, i.e., without justifiable cause, only at the peril of the vacation of the stay. The date of hearing of the appeal is fixed for 11.05.2015, even as pronounced in the open court on the conclusion of the hearing. We decide accordingly.

5. In the result, the assessee's stay application is allowed on the aforesaid terms.

Order pronounced in the open court on February 20, 2015

Sd/- Sd/-

(Vijay Pal Rao) (Sanjay Arora) या यक सद य / Judicial Member लेखा सद य / Accountant Member मुंबई Mumbai; )दनांक Dated : 24.02.2015 3 SA No. 42/Mum/2015 (A.Y 2010-11) Safilo India Private Limited vs. Dy. CIT

व. न.स./Roshani, Sr. PS आदे श क" # त%ल&प अ'े&षत/Copy of the Order forwarded to :

1. अपीलाथ* / The Applicant

2. +,यथ* / The Respondent

3. आयकर आयु-त(अपील) / The CIT(A)

4. आयकर आयु-त / CIT - concerned

5. वभागीय + त न2ध, आयकर अपील&य अ2धकरण, मुंबई / DR, ITAT, Mumbai

6. गाड6 फाईल / Guard File आदे शानस ु ार/ BY ORDER,

उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपील य अ धकरण, मुंबई / ITAT, Mumbai