TMI Blog2011 (12) TMI 358X X X X Extracts X X X X X X X X Extracts X X X X ..... ajor issues highlighted by the ld. counsel for the assessee before us there is a prima facie case made out by the assessee - The OECD guidelines also seem to support the plea of the assessee. It was submitted by the ld. counsel for the assessee that a sum of ₹ 35 crores towards outstanding demand has already been paid by the assessee - the appeal of the assessee is directed to be fixed for out of turn hearing on 14/2/2012 - SA No. 264/Mum/2011, ITA No. 7808/Mum/2011; - - - Dated:- 21-12-2011 - P.M. Jagtap, N.V. Vasudevan, JJ. Dishesh Vyas and Raju Vakharia for the Appellant A.K. Nair for the Respondent ORDER N.V. Vasudevan, Judicial Member 1. This is an application filed by the assessee praying fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re expenses 44,54,144 7. Disallowance of deduction u/s. 35D 15,81,191 8. Disallowance of expenditure on right to use land at Bandra Kurla Complex 21,01,98,685 9. TRNSFER PRICING ADJUSTS 9a International telecommunication services (includes disallowance of residual loss of ₹ 56,02,30,826) 447,76,89,010 9B Interest on loan 4,45,33,291 9C Guarantee fee 12,60,02,891 9D Letter of Comfor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the existing telecommunication business which was commenced in 1986. It is the principle submission of the assessee that an undertaking of a company is separate from the company. The fact that the company might have been carrying on business activity since 1986 cannot be a bar to eligibility of an undertaking which has been set up to carry on similar or new activity on or after 1st April 1995. Internet services are separate and distinct from the other telecommunication services provided by the Assessee. Investment amounting to ₹ 386.86 crores was made in various equipments for providing internet services. There are 133 personnel employed for providing Internet services. National Long Distance ('NLD') services are rendered t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hey have to pay to the operators in the other end for terminating the traffic. This pricing mechanism is guided by the International Telecommunication Union ( ITU ) regulations at the global level to which Government of India is also a signatory. In case the assesses proposes to deviate from this pricing guidance it would be in contradiction to the ITU regulations. The assessee renders international telecommunication services under the ILD (International Long Distance) license granted by the Department of Telecommunications which are subject to the transfer pricing regulations. As per the terms of ILD License the assessee picks up the traffic from the basic, mobile and national long distance operators in India and terminates it into the int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prise may incur the costs of renting advertising space on behalf of group members, costs that the group members would have incurred directly had they been independent. In such a case, it may well be appropriate to pass on these costs to the group recipients without a mark-up, and to apply a mark-up only to the costs incurred by the intermediary in performing its agency function. 6. It was further submitted that in various tax disputes the assessee has already paid a sum of ₹ 1700 crores to the Income Tax Department, where matters are pending for adjudication before various appellate authorities. Thus sizable portion of its working capital is blocked and is unavailable for its regular business. It was also submitted that the tel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade by the AO is concerned, we are of the view that on the issue whether mark-up can be applied on pass through cost, there is a decision of the by the Delhi Bench of the Tribunal in favour of the Assessee, which has been referred to by the ld. counsel for the assessee. The OECD guidelines also seem to support the plea of the assessee. It was submitted by the ld. counsel for the assessee that a sum of ₹ 35 crores towards outstanding demand has already been paid by the assessee. Thus the remaining outstanding demand is ₹ 250 cores (approx.). We are of the view that taking into consideration the existence of a prima facie case, balance of convenience and hardship, the outstanding demand should be stayed subject to the condition th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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