IN INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: FRIDAY-E NEW DELHI BEFORE SMT DIVA SINGH, JUDICIAL MEMBER AND SH.PRASHANT MAHARISHI, ACCOUNTANT MEMBER S.A.No.-476/Del/2016 (In I.T.A .No.-1553/Del/2016) (ASSESSMENT YEAR-2012-13) Microsoft Regional Sales Corporation, Vs DCIT, C/o-Mr. Aakash Uppal (Director), SRBCC & (International Associates LLP, 6th Floor, Wing & B, Taxation), Worldmark 1, Aero City, Opp. Holiday Inn, Gurgaon Mahipalpur, New Delhi-110037. PAN-AADCM1638A (APPELLANT) (RESPONDENT) Assessee by Sh. Umesh Chander Dubey, Sr.DR Revenue by Sh.Sandeep S.Karhail, Adv. & Sh. Shatanik Chakrabarty, Adv. Date of Hearing 14.10.2016 Date of Pronouncement 14.10.2016 ORDER PER DIVA SINGH, JUDICIAL MEMBER By present Stay petition moved under Rule 35A of ITAT Rules, 1963 assessee prays for extension of stay which was originally granted by Co-ordinate Bench on 12.04.2016 in S.A.No.208/Del/2015 in ITA No.1553/Del/2016. Extension is sought on ground that delay in hearing appeal is not attributable to assessee. 2. Addressing issues, it was submitted that earlier years appeals have been decided by ITAT in case of assessee alongwith appeals of MOL Corporation by consolidated order dated 26.09.2016. It was stated that although there is some similarity on issues however there is fresh issue also in year under consideration qua cloud computing which is required to be addressed. S.A.No.-476/Del/2016 (In I.T.A .No.-1553/Del/2016) 3. Inviting attention to record, it was submitted by Mr. Sandeep S.Karhail, Adv. that appeal came up for hearing on 11.05.2016; 02.06.2016; and 22.09.2016. On each of these days assessee it was submitted was ready to argue, however on 02.06.2016, Bench was not functional and appeal was refixed by Registry. On remaining 2 occasions, appeal came up for hearing i.e. on 11.05.2016 & 22.09.2016 and adjournments were sought by Revenue. 3.1. following extract of hand-written order sheet dated 22.09.2016 in ITA No.1553/Del/2016 was read out:- Adj. to 24th Oct. 2016 on written request of CIT DR. Mr. Anuj Arora who seek consolidation with MOL Corporation s Appeal. particulars to be provided by Revenue and seek consolidation by way of petition before Hon ble Vice President in stay granted appeal wherein stay is stated to be expiring on 07the Oct. 2016. Mr.Anil Sharma, Sr.Dr present. Subject to consolidation Revenue would be at liberty to pray for earlier date by way of petition before Competent Authority. Mr.Karhail, Adv. for assessee. Read out in Tribunal. Sd/- Sd/- (P.Maharishi) (Diva Singh) (emphasis provided in present proceedings) 3.2. Considering above, Mr. Umesh Chander Dubey, Sr. DR appearing on behalf of Revenue was required to state whether any application seeking consolidation had been addressed by Revenue. Ld.Sr.Dr stated that he had no knowledge of any such request. However, reading from order of ITAT, it was submitted that as per facts of present case, it is protective assessment. On query, he was unable to state fate of appeal where addition has been made on substantive basis. 3.3. Ld.AR on query stated that though he is not aware of any petition seeking consolidation having been filed by Revenue however he was aware that appeal of MOL Corporation in ITA No.1554/Del/2016 wherein substantive assessment has been made has been filed before ITAT on 23.03.2016. said appeal it was stated Page 2 of 5 S.A.No.-476/Del/2016 (In I.T.A .No.-1553/Del/2016) has not been listed for hearing till date. It was further clarified that no stay petition has been filed therein before ITAT as pursuant to directions of AO, part payment has been made by that assessee. 3.4. Ld. Sr. DR was required to address whether Revenue would like to pre-pone date of hearing from 24.10.2016 to earlier date. However, Ld. Sr. DR stated that he had no instructions thereon. 4. We have heard rival submissions and perused material available on record. We find that Co-ordinate Bench in S.A.No.208/Del/2016 vide its order dated 12.04.2016 passed following order:- 5. We find that facts of case in hand are exactly identical to those of A.Y.2011-12. Accordingly, respectfully following same, we grant stay of disputed outstanding amount of Rs.33,99,83,903/- in ITA No.1553/Del/2016 for A.Y. 2012-13 for period of six months or till disposal of appeal, whichever is earlier on same terms and conditions as given in A.Y.2011-12. Registry is directed to fix appeal for hearing on 11.05.2016. (emphasis provided) 4.1. We find from record that assessee unlike assessee in MOL Corporation in ITA No.1554/Del/2016 in facts of present case directly approached ITAT and did not go either before AO or any of tax authorities to seek stay. We further find that it is undisputed fact that addition in facts of present case has been made on protective basis and substantive addition has been made in case of MOL Corporation USA which appeal admittedly has not been listed for hearing. We further find that in peculiar facts and circumstances of case where admittedly no recovery proceedings have been carried out by Revenue since as per legal jurisprudence protective assessment is permissible, however protective recovery is not permissible which fact has been taken note of by Co-ordinate Bench in para 4 in earlier stay order wherein following Page 3 of 5 S.A.No.-476/Del/2016 (In I.T.A .No.-1553/Del/2016) order dated 17.04.2015 in S.A. No.230/Del/2015 in ITA No.1615/Del/2015 in case of assessee itself in 2011-12 AY legal position was noted. For ready- reference, aforesaid extract from S.A.No.208/Del/2016 is reproduced hereunder:- 4. We have heard both parties and perused records available with us and especially contention raised by assessee in present Stay Application, we are of considered view that since demand raised on assessee has already been raised on MOL Corporation and said Demand raised on assessee is on protective basis. As pointed by Ld. Counsel of assessee that 'in -assessment year 2007-08 and 2008-09 assessee has also filed Stay Application in Appeals and this Bench vide order dated 31.12.2011 has also stayed recovery of due demand. Ld. Counsel further pointed that ITAT has further granted Stay vide its Order dated 11.4.2014 to assessee in Stay Application No. 219/Del/2014 (A.Y. 2010-11). As pointed out by Counsel of assessee in present Stay Application that ITAT has passed favourable orders in assessee's own cases for asstt. year 1999-2000, 2001-02 dated 26,10.2010, asstt. year 2002-03 to 2006-07 dated 30.11.2011 and A.Yrs.2007-08 to 2008-09 order dated 29.2.2012 and A.Y. 2009-10 order dated 5.7.2013, wherein it has held that payments received by MRSC from Indian distributors is not taxable in hands of MRSC as same has already been taxed in hands of its group entity, Gracemac Corporation (now MOL Corporation). Hon'ble High Court of Delhi has affirmed order of ITAT for asstt. year 2009-10 vide its order dated 16.7.2014. Ld. Counsel of assessee has also cited various judgments rendered by Hon'ble High Courts supporting contention of assessee for granting Stay Demand in dispute. 4.2. Accordingly in aforesaid peculiar facts and circumstances of case noting that balance of convenience is in favour of assessee and fact that decision in 2011-12 AY in assessee s own case is available on record, we deem it appropriate after hearing parties to:- (a) Extend stay for period of six months or disposal of appeal whichever is earlier; (b) Direct Registry to tag ITA No.1554/Del/2016 alongwith present appeal for hearing on 24.10.2016 and issue notice etc. to parties post haste as without decision on substantive appeal present appeal cannot be decided; and Page 4 of 5 S.A.No.-476/Del/2016 (In I.T.A .No.-1553/Del/2016) (c) Direct that no adjournment on any unreasonable ground shall be sought by assessee. 5. In result, stay petition of assessee is allowed. order is pronounced in open court on 14th of October, 2016. Sd/- Sd/- (PRASHANT MAHARISHI) (DIVA SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Amit Kumar Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI Page 5 of 5 Microsoft Regional Sales Corporation v. DCIT, (International Taxation), Gurgaon