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2017 (9) TMI 376 - AT - Income TaxTransfer pricing adjustment on Advertisement, Marketing and Promotion (AMP) expenses - determination of the existence or otherwise of an international transaction on account of AMP expenses incurred by the assessee - TPO treated the AMP spend as a separate international transaction - Held that:- We do not find any logic in applying 5% as a benchmark mark-up, which is not emerging from any discussion in the order. In other words, there is no attempt to find out the mark-up of comparables by analyzing the AMP functions carried out by the assessee vis-ŕ-vis the comparables. To put it straight, neither the assessee nor the TPO have followed the prescription of the judgment in the case of Sony Ericsson (2015 (3) TMI 580 - DELHI HIGH COURT) for benchmarking. Further, we note that no detail of the AMP functions performed by the assessee is available on record. Similarly, there is no reference in the order of the TPO to any AMP functions performed by comparables. In fact, no such analysis or comparison has been undertaken by the TPO. The ld. AR also failed to draw our attention towards any material divulging the AMP functions performed by the assessee as well as comparables. As such, we are handicapped to determine the ALP of AMP expenses at our end, either in a combined or a separate approach. Since the orders of the authorities below are not in conformity with the ratio laid down in Sony Ericsson (supra) as discussed above and further necessary details for doing this exercise at our end are also not available, we set aside the impugned order and send the matter back to the file of the TPO/AO for determining the ALP of the international transaction of AMP spend afresh in accordance with the manner laid down by the Hon’ble High Court in Sony Ericson Mobile (supra). Before parting, we consider it relevant to record that similar issue was raised by the assessee before the Tribunal for the immediately preceding two assessment years. The Tribunal in both the years, by its separate orders, has restored the matter to the Assessing Officer/TPO for a fresh adjudication. Not allowing deduction towards interest on Customs Duty - Held that:- We are convinced with the view canvassed by the DRP as followed in the impugned order. Obviously, the assessee paid interest on Customs Duty in the financial year 2015-16. The liability towards such interest got crystalised and paid during such later year only. By no standard, the assessee can claim deduction for a part of such interest in the year under consideration. As the claim pertains to a subsequent period, the assessee may take necessary action for getting the deduction in such later year as per law.
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