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2015 (6) TMI 514 - AT - Income TaxTransfer pricing adjustment - AO/ TPO had accepted and adopted TNMM method with regard to other international transaction, therefore, no separate bifurcation of AMP expenses is to be made as per assessee - Held that:- Submission of assessee cannot be accepted because TPO had applied the bright line test by considering those comparables which were routine distributors. He did not carry out any study with reference to the functions performed by comparables selected by him vis a vis functions performed by assessee in regard to its marketing and distribution activities. The international transaction of AMP expenses can be clubbed with other international transactions carried out by assessee as distributor, if AMP functions performed by tested party and comparables are same. If there is difference in the functions between the assessee and comparables, the suitable adjustment was to be first made to bring the both at same pedestals. It is pertinent to note that comparables selected by assessee in its TP study for benchmarking the distribution activity and for benchmarking the AMP functions only Remi Elektrotechnik Ltd. is common in both. Therefore, the plea that since TPO has accepted TNMM method, therefore, AMP expenditure should not be separately considered is devoid of any merit. In view of the decision of Hon’ble High Court in Sony Ericsson case (2015 (3) TMI 580 - DELHI HIGH COURT ), there is no dispute that the discount and sales commission being directly attributable to selling activities of assessee, have to be excluded from the components selected by TPO in regard to AMP expenses. However, as far as submissions of ld. counsel with regard to the expenses in connection with the sponsorship and sales promotion are concerned, we are of the opinion that since the assessee’s plea has not been examined by ld. DRP/ TPO, the matter should be restored to file of TPO/ DRP to record a finding on the assessee’s claim as noted in the submissions of ld. authorized representative. - Decided in favour of assessee for statistical purposes.
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