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2015 (10) TMI 2675 - AT - Income TaxAdjustment for AMP expenses - AR has submitted that gross profit margin earned by the assessee being higher than gross profit margin by internal as well as external comparables, no adjustment for AMP expenses was required in the case of the assessee - whether we can compute the arms length price of the international transaction of AMP expenses in the given circumstances or we need to remit the matter back to the AO as submitted by the learned SR DR - Held that:- Authorised Representative has submitted that gross profits margin earned by the assessee being higher than gross profit margins earned by comparables companies, no adjustment is required for the purpose of computing arms length price of international transaction of AMP expenses. If the argument of the learned AR is accepted, it will lead us to a result where the AMP transaction will be rendered as non international transaction, as against the findings of the Hon’ble High Court in the case of Sony Erricsson (supra). The Hon’ble High Court has directed to find out AMP functions of comparables and compare the same with the AMP functions performed by the assessee and then after making adjustments if any compute the arms length price of the international transaction in bundled manner for distribution as well as AMP expenses and if not possible to compute in bundled manner, then only in separate manner. But in the case in hand the AMP functions performed by the external comparable are neither submitted by assessee before the AO/TPO nor examined by the TPO. The learned Authorised Representative has also failed to exhibit us the AMP functions carried out by the assessee and compare those functions with the AMP functions of the comparables and without that analysis the arms length price of the AMP functions cannot be determined at our level. We are also in agreement with the submission of the learned Senior Departmental Representative that the figures given in the tables by the learned Authorised Representative are not verifiable from the orders of the AO/TPO. In view of the above facts and circumstances, we are unable to determine the ALP of AMP expenses at our own either in the bundled or a separate approach. We remit the matter back to the file of AO/TPO for determination of ALP on international transaction on AMP expenses, in accordance with the direction laid down by the Hon’ble High Court in the case of the assessee led by Sony Ericson Mobile Communication P Ltd (2015 (3) TMI 580 - DELHI HIGH COURT ). Needless to say that the assessee shall be afforded a reasonable opportunity of being heard.
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