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2018 (12) TMI 1852 - AT - Income Tax
TP Adjustment - existence of international transactions qua AMP expenses - HELD THAT:- We are of the considered view that since the taxpayer is a full-fledged manufacturer as 87% of its turnover is from the sale of its manufactured goods in India and the entire AMP expenses have been incurred by it to enhance its sale in India and not for promoting the brand of its AE and for creating intangibles for its AE, the alleged excess AMP expenditure does not fall in the category of international transactions. Moreover, the Revenue has not brought on record any cogent evidence to prove these facts. So, following the law laid down by the Hon’ble Delhi High Court in case cited as Maruti Suzuki India Ltd. v. CIT [2010 (7) TMI 84 - DELHI HIGH COURT] we are of the considered view that adjustment made by the Revenue on account of incurrence of AMP expenses are not sustainable in the eyes of law. ALP of an international transaction involving AMP expenses, the adjustment made by the TPO/DRP/AO is not sustainable in the eyes of law.
Comparable selection - functional dissimilarity - HELD THAT:- The taxpayer during the year under assessment entered into international transactions qua provision of Information Technology Enabled Services (ITES) in the form of provisions of services in the nature of payroll processes, account processes, etc. thus companies functionally dissimilar with that of assessee need to be deselected.