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2014 (1) TMI 393 - AT - Income TaxTransfer pricing adjustment in respect of Advertising, Marketing & Promotion (AMP) expenses - Held that:- Following LG Electronics India Pvt. Ltd. Vs. ACIT [2013 (6) TMI 217 - ITAT DELHI] - Incurring of AMP expenses towards promotion of brand, legally owned by the foreign AE, constitutes a `transaction' - To determine correct ALP of AMP expenses, the Tribunal listed out 14 parameters which should be examined by the AO/TPO before reaching the final conclusion about the warrant for a TP Adjustment on this score - The first parameter that the AO/TPO should ascertain as to whether the Indian AE is simply a distributor or is holding a manufacturing license from its Foreign AE - The second parameter talks of examining as to whether or not the Indian AE is a full fledge manufacturer and whether it is selling the goods purchased from the Foreign AE as such or is making some value addition to the goods purchased from its Foreign AE before selling it to customers - There is not even a slightest doubt that the special bench order not only applies to a `Manufacturer', but also extends to a distributor, whether he is a bearing full risk or least risk - Such tests are applicable with full vigor to the extent applicable, to the distributors - The assessee was a full fledge distributor and as such the benefit of AMP expenses did not spill over to the foreign AE - Decided in favour of Revenue.
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