TMI Blog2014 (7) TMI 951X X X X Extracts X X X X X X X X Extracts X X X X ..... admitted. Transfer pricing adjustment - Advertisement, marketing and sales promotion expenses - Held that:- The AMP expenses refer only to advertisement, marketing and publicity and the selling expenses which are specific to sales cannot be considered within the ambit of AMP expenses - the expenses for the promotion of sales are to be considered within the purview of AMP expenses, whereas the expenses in connection with the sales which are simply sales specific, are outside the scope of AMP expenses - Following the decision in LG Electronics Pvt. Ltd. vs. ACIT [2013 (6) TMI 217 - ITAT DELHI] - when the assessee is claiming deduction in the computation of total income for the amount used during the year only and the balance amount of pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the issue in this case is fully covered by the Special Bench order in the case of LG Electronics Pvt. Ltd. vs. ACIT (2013) 140 ITD 41 (Del) (SB). The ld. AR contended that similar direction be given to the AO/TPO for deciding this issue afresh and restricting the transfer pricing adjustment, if any, in the light of the Special Bench decision, after excluding the selling expenses out of the amount considered by the AO under AMP expenses. The ld. DR was fair enough to concede the position stated on behalf of the assessee. 4. It is observed that the Special Bench in the case of LG Electronics (supra) has held that the AMP expenses refer only to advertisement, marketing and publicity and, as such, the selling expenses which are specific ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of Rotork Controls India (P) Ltd. vs. CIT (2009) 314 ITR 62 (SC). On the other hand, the ld. DR relied on the judgment of the Hon ble Calcutta High Court in Indian Steel and Wire Products VS. CIT (1994) 208 ITR 740 (Cal) for opposing the admission of additional ground by contending that all the material facts necessary for adjudication of this ground were not available before the AO and further this ground does not arise out of the impugned order. 7. We have heard the rival submissions and perused the relevant material on record. The Hon ble Supreme Court in the case of National Thermal Power Company Ltd. Vs. CIT (1998) 229 ITR 383 (SC) has held that the Tribunal has the jurisdiction to examine a question of law which arises fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at page 503 of the paper book from which it can be seen that a sum of ₹ 8.70 crore was added to the net adjusted profit taken as the starting point for computation of total income with the remarks Provision for warranty created during the year and, thereafter, deduction was claimed for a sum of ₹ 1.43 crore with the remarks Warranties used during the year. It shows that the assessee added back the amount of provision debited to the Profit Loss Account and claimed deduction for warranties actually used during the year. The Hon ble Supreme Court in the case of Rotork Controls India (P) Ltd. (supra) has held that : if large number of sophisticated goods are manufactured and sold with warranty and the past record show that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls India (P) Ltd. (supra), we direct the AO to consider and examine the assessee s claim in this regard on the touchstone of the prescription given by the Hon ble Supreme Court in that very case. Before jumping to any conclusion for allowing deduction towards provision for warranty for this year at ₹ 8.70 crore, the AO should keep in mind that this amount of provision should not lead to double deduction, firstly at the time of creation of provision in the current year and then at the time of actual use of the amount in subsequent years. In other words, the AO would examine the claim for deduction of provision for warranties during the year only to the extent for which no deduction has been claimed on actual basis in this year or subse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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