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2021 (10) TMI 439 - AT - Income TaxTP adjustment in trading segment - adoption of Most Appropriate Method - assessee has adopted RPM method as most appropriate method while benchmarking the transactions - TPO has rejected the method and adopted TNMM as the most suitable method and proposed TP adjustment - HELD THAT:- As relying on assessee's own case [2019 (8) TMI 1766 - ITAT MUMBAI] we direct Ld. AO / TPO to consider the benchmarking using RPM method and re-determine the issue of ALP of these transactions. This ground of assessee’s appeal stand allowed for statistical purposes. TP adjustment on account of AMP expenditure - International transaction u/s 93B - HELD THAT:- We find that there is no express agreement between the assessee and its AE wherein the assessee is required to incur the AMP expenditure for brand building on behalf of its AE. All these payments are third party payments. There is no concrete material in support of conclusion of Ld.CIT that there was a prima facie arrangement between the AE and the assessee to incur such expenditure. The said observation is not supported by any express agreement on record. Unless it was shown that there was such an arrangement which resulted into any direct or indirect benefit to the brand of assessee’s AE, these transactions could not be regarded as international transaction u/s 92B as held by Hon’ble Delhi High Court in the case of Maruti Suzuki India Ltd. V/s CIT[2015 (12) TMI 634 - DELHI HIGH COURT]. Disallowance u/s 37(1) on account of Medical Freebies - expenditure has been disallowed in terms of Indian Medical Council (Professional Conduct, Etiquette and Ethics) regulations, 2002 as applicable from 14/12/2009 - HELD THAT:- As in catena of judicial decision, it has been held that the aforesaid regulations apply to Medical Practitioners only and not to pharmaceutical companies incurring such expenditure. The amount so expanded would be an allowable deduction u/s 37(1) - the regulations as referred to by lower authorities to make the disallowance are not applicable to the assessee and thus, the disallowance is not sustainable in law. By deleting this addition, we allow assessee’s ground of appeal. Thus we would hold that the given transactions could not be regarded as international transaction as defined under section 92B of the Act and therefore, no transfer pricing adjustment could have been made by the Transfer Pricing Officer in this regard. The grounds raised by the assessee stands allowed which makes revenue’s grounds infructuous.
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