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2013 (10) TMI 592 - AT - Income TaxTransfer Pricing adjustment - International transaction with Associated enterprise - Held that:- It is relevant to note that sub-sec. (2A) is a general provision on the issue of the TPO suo motu taking up an international transaction not referred by the AO, whereas sub-sec. (2B) is a special provision limited in its scope only to such international transactions in respect of which the assessee did not furnish report u/s 92E - when there is special provision governing a particular types of cases, then such cases stand excluded from the general provision governing all the cases - it is palpable that all the three necessary ingredients as culled out from a bare reading of section 92B are fully satisfied in the present case. There is a transaction of creating and improving marketing intangibles by the assessee for and on behalf of its foreign AE; the foreign AE is non-resident; such transaction is in the nature of provision of service. Resultantly, the Revenue authorities were fully justified in treating the transaction of brand building an international transaction in the facts and circumstances of the present case - Following decision of LG Electronics India Pvt. Ltd., Noida vs. ACIT [2013 (6) TMI 217 - ITAT DELHI] - Decided against assessee. Transfer pricing adjustment of AMP expenses - Held that:- expenses in connection with the sales do not lead to brand promotion and thus cannot be brought within the ambit of advertisement, marketing and promotion expenses for determining the cost/value of the international transaction. In view thereof, we direct the Assessing officer to exclude the expenses incurred by the assessee in connection with the sales totaling ₹ 5500.86 lacs as the same do not fall within the ambit of AMP expenses and hence not to be considered for computing the cost/ value of international transaction - expenditure relating to sales do not lead to the brand promotion and thus cannot be brought within the ambit of advertisement, marketing and promotion expenses for determining the cost / value of the international transaction - Following decision of Glaxo Smithkline Consumer Healthcare Ltd. Versus Additional Commissioner of Income-tax, Range-IV, Chandigarh [2012 (4) TMI 279 - ITAT CHANDIGARH] - Decided in favour of assessee. Capital or Revenue expenditure - Disallowance of advertisement expenditure - Held that:- Revenue expenditure which is incurred and exclusively for the purpose of business must be allowed in its entirety in the year in which it is incurred. It cannot be spread over a number of years even if the assessee has written it off in his books over a period of years - It has not deferred the expenses at its end in the books rather it claimed that total expenses in the return. The Assessing Officer himself allowed only to the extent of 1/5th - Following decision of Madras Industrial Investment Corporation Limited Versus Commissioner of Income-Tax [1997 (4) TMI 5 - SUPREME Court] - Decided in favour of assessee. Deduction u/s 32 - Held that:- Assessing Officer is right in observing that provisions of section 32(1)(iii) should be applied for treating the damages to glow sign boards. These glow sign boards pertain to block of assets of furniture and fixtures which is still appearing in the schedule of assets - Matter remitted back - Decided in favour of assessee.
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