TMI Blog1997 (2) TMI 155X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 234B of the Act. The assessee has prayed for the stay of recovery of the above demand till the disposal of reference (RA No. 98/Ahd/1996) pending before the Hon'ble Gujarat High Court. 2. Shri M.P. Sarda, the learned counsel for the assessee submitted that the appeal has been decided by the Tribunal and a reference under s. 256(1) has been granted. The demand raised is more than the company's worth. In the year 1995-96, the company has incurred substantial losses mainly due to the non-availability of working capital finance on account of the coercive action taken by the Department. The operations of the company have come to a stand-still and the factory is closed for last several months. The company has no liquid funds. The net worth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ified by three oil mill associations; (d) G.P. or the financial results of the company have not been found to be unsatisfactory; (e) The yield in respect of groundnuts as shown by the company is much better than the comparable cases cited by the AO, and (f) The yield in respect of rapeseeds purchased from O.G.S. has been accepted. The difference between the yield in respect of rapeseeds purchased from OGS and rapeseeds purchased from within the State is on account of the price difference of the seeds. Hence, when the yield from OGS purchases has been accepted, there is no justification for rejecting the yield out of purchases from within the State which are made at cheaper rate. The learned counsel for the petitioner company fur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r company submitted that the Tribunal has powers to grant stay of collection when a reference to the High Court has been granted. In support of this contention, he relied upon the judgment of the Supreme Court in the case of ITO vs. M.K. Mohamed Kunhi (1969) 71 ITR 815 (SC), CIT vs. Bansi Dhar Sons (1986) 50 CTR (SC) 250 : (1986) 157 ITR 665 (SC) and the judgment of the Allahabad High Court in the case of Abbas Wazir (P) Ltd. vs. ITAT (1994) 205 ITR 457 (All). At the end, the learned counsel for the petitioner company prayed that the company's liquidation be stayed till the reference is decided; that the company is not allowed to die prematurely before it receives justice from the higher judicial forum. The learned counsel also assured th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 970) 77 ITR 608 (Mad), Puran Mal Kauntia vs. ITO (1975) 98 ITR 39 (Pat); 28 STC-652, 54-STC-268 and 52 STC-174 etc. It is also well settled that the pendency of the reference means pendency of the appeal before the Tribunal and during the pendency of the reference, the Tribunal is empowered to stay recovery. This has been made clear by the Supreme Court in the case of CIT vs. Bansi Dhar Sons where the Hon'ble Supreme Court has held as under: "In an appropriate case, if the assessee feels that a stay of recovery pending disposal of the reference is necessary or is in the interest of justice, then the assessee is entitled to apply before the appellate authority to grant a stay until disposal of the reference by the High Court of until su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would be of no avail and, therefore, in our opinion any such steps would cause liquidation of the petitioner company before it gets justice from the High Court. In the meanwhile since all the assets of the petitioner company are already attached by the IT Department, the Department is secured to the maximum possible. Under the circumstances we feel that it is a fit case in which stay of recovery should be granted on certain conditions. 5. We accordingly stay the outstanding demand till the decision of the High Court on the reference application or 31st Dec., 1997, whichever is earlier, subject to the condition that the petitioner company will furnish an adequate security to the satisfaction of the AO. In the meanwhile, as assured by the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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