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2018 (12) TMI 113 - AT - Income TaxTP adjustment on account of ALP of reimbursement of AMP prices applied BLT - whether BLT applied by TPO/DRP in this case is an appropriate method for determining the international transactions ? - Held that:- When the BLT method adopted by the TPO incurring the AMP expenses by following the ratio of LG Electronics India Pvt. Ltd. [2013 (6) TMI 217 - ITAT DELHI] decided by Special Bench of the Tribunal, has been held to be not legally sustainable by the Hon’ble Delhi High Court in series of judgments, the entire exercise of determining AMP expenses as international transaction by the TPO is without any basis, hence not sustainable. Following the decision rendered by Hon’ble Delhi High Court in taxpayer’s own case for AY 2008-09, we are of the considered view that TP adjustment of involving AMP expenses is not sustainable in the eyes of law, we are of the considered opinion that the ALP of an international transaction involving AMP expenses, the adjustment made by the TPO/DRP/AO is not sustainable in the eyes of law, hence Grounds determined in favour of the taxpayer. At the same time, we cannot ignore the submission of the learned DR that the matter is pending before Hon'ble Apex Court and the decision of Hon'ble Apex Court would be binding upon all the authorities. In view of the above, we set aside the orders of authorities below and restore the matter to the file of the Assessing Officer. We hold that as per the facts of the case and the legal position as of now and discussed above in this order, the adjustment made by the TPO/DRP/AO in respect of AMP expenses is not sustainable. Addition u/s 37 - large amount incurred by the taxpayer as AMP expenditure was not for the purpose of business of the taxpayer - Held that:- when the issue as to ALP adjustment of AMP expenses has already been dealt with and decided in favour of the taxpayer in view of the series of decisions rendered by Hon’ble Delhi High Court u/s 92 of the Act, the same AMP expenses cannot be dealt with u/s 37 of the Act which would amount to double addition if the addition made u/s 92 of the Act found to be sustainable. So, when ALP adjustment of AMP expenses is found to be not sustainable for lack of existence of any international transaction between taxpayer and AE, the same also cannot be brought to tax in the alternative u/s 37 of the Act. Consequently, ground determined in favour of the taxpayer.
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