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2017 (5) TMI 473 - ITAT DELHIDisallowance on account of transit breakages - Held that:- The disallowance has been upheld by the Hon’ble High Court of Delhi [2015 (10) TMI 491 - DELHI HIGH COURT] in assessee's own case for AY 2001-02. In view of the fact that this issue has been decided against the assessee by the Hon’ble High Court and against which SLP filed by the assessee was also dismissed, we decide the issue against the assessee and as such these grounds of appeal are dismissed. Transfer pricing adjustment on account of marketing support services - absence of international transaction - Held that:- Respectfully following the co-ordinate benches decision in the assessee’s own case we direct that the reimbursements have to be included in the cost base and the operating margins have to be computed accordingly. As regards the grounds of appeal raised by the revenue against the partial relief granted by the Ld. CIT (A) towards allocation of costs, no sustainable ground has been presented before us by the revenue and as such the order of the Ld. CIT (A) is confirmed. Hence, these grounds of appeal of the assessee and the revenue are disposed off in terms of these directions. Transfer pricing adjustment on account of Advertisement, Marketing and Promotional (“AMP”) expenses incurred by the assessee for promotion of its brands in India - Held that:- As where the products are India specific there cannot be any adjustment in respect of the AMP expenditure since no benefit arises to the AE on account of such expenditure. Accordingly, these grounds of the revenue are rejected and order of the Ld. CIT (A) is confirmed.Our adjudication in favour of the assessee is guided by the undisputed fact that in the case of the assessee the AMP spend was India specific as the said brands were also India specific and there is no possibility that any benefit could have arisen to the non-resident AE. If the product manufactured and sold by the assesse is India specific then it cannot be said that any benefit could have accrued to the AE on account the AMP spend in India in respect of such brands. Disallowance of deduction being provision for commission on sales - Held that:- Since there is no discussion by the AO on the issue at hand, we deem it fit and in the interest of justice to set aside the addition and remand the matter to the file of the AO for a fresh consideration in accordance with law and after giving adequate opportunity to the assessee. Addition being 10% of brand expenses made by the AO treating the same as being capital in nature - Held that:- We find force in the arguments of the Ld. Counsel that the issue is squarely covered in favour of the assessee as there is a clear finding that such expenditure does not result in any enduring benefit. Hence, these grounds of the revenue are dismissed and the order of the Ld. CIT (A) is confirmed.
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