ITAT Stayed Demand of ‘eBay’ as AO Repeatedly Insisted on Payment of 20% of Demand Without Considering TDS Amount

Case Details: eBay Singapore Services (P.) Ltd. v. Deputy Commissioner of Income-tax (IT) - [2023] 153 taxmann.com 661 (Mumbai-Trib.)

Judiciary and Counsel Details

• • Amit Shukla, Judicial Member & B.R. Baskaran, Accountant Member
  • Porus Kaka & Manish Kanth for the Appellant.
  • Anil Sant for the Respondent.

Facts of the Case

Assessee filed application for stay of demand before the Assessing Officer (AO), wherein the AO passed an order requiring the assessee to pay 20% of the outstanding demand. The case of the assessee was that it had already paid Rs. 261.27 crores by way of TDS, which was more than 20% of the disputed tax liability. However, AO directed the assessee to pay 20 per cent of the net demand.

ITAT Held

The Tribunal ordered the AO to calculate 20% of the total disputed demand, not just the outstanding demand under section 156. The case was sent back for verification. If 20% of the disputed demand was paid, the AO should grant stay to the assessee.

However, AO insisted that the assessee to pay 20% of the total demand. Assessee filed second appeal before the Tribunal. Despite having given direction twice by the Tribunal, AO directed the assessee to pay 20 per cent of the outstanding demand without considering the TDS paid by the assessee.

The Mumbai Tribunal has ruled that the ‘outstanding demand’ may comprise various components that the assessee may not have even challenged or would result from various adjustments. Whereas, the disputed demand has to be seen qua the addition which has been disputed before this Tribunal on which the appeal has been filed under section 253(1).

In the instant case, the assessee deposited TDS on capital gain, but the entire addition was challenged before AO as well as before the Tribunal. Such TDS amount undisputedly was more than 20% of the demand as worked out by AO in his computation of demand relating to this addition.