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2019 (9) TMI 937 - AT - Income TaxTransfer Pricing (TP) adjustment in relation to an alleged international of Advertisement, Marketing & Sales Promotion (AMP) expenses - HELD THAT:- A copy of the computer generated trademarks certificate report from Govt. of India, Ministry of Commerce & Industry, Department of Industrial Policy & Promotion, Controller of Patents, Designs & Trademarks Website, was filed before us to demonstrate the fact that the trademark 'Unibic' is owned by assessee and application for grant of registration of this trademark was made by the assessee as early as on 23.09.2009. This fact is very vital. If the trademark is owned by assessee, AMP expenses cannot be disallowed consequent to determination of ALP because those expenses would be in the nature of business expenses of assessee. Assessee also filed before us sample advertisements to demonstrate that whatever advertisements were carried out in India were India-specific and by no stretch of imagination said to promote the brand of owned by the AE. Correctness of determination of Arm's Length Price (ALP) in respect of a trading transaction of sale of cookies by the assessee to its Associated Enterprise (AE) - HELD THAT:- DRP ought to have considered the TP study filed by the assessee before it and considered the objections of assessee. We are also of the view that in the light of the fact that net margins on cost of goods sold to unrelated parties being less than the net margins on sale of related parties, the transactions with AE has to regarded as at arm's length. The internal TNMM adopted by the assessee would show that the price charged in the international transaction on sale of cookies to Unibic, Australia was at arm's length. Since the TPO did not have an occasion to examine this report, we deem it fit and appropriate to set aside the order of the ld. DRP on this issue and remand the question of determination of ALP in respect of transaction on sale of cookies to Unibic, Australia for fresh consideration by the AO/TPO keeping in mind the observations made in this order and also taking note of the TP study and other details filed by the assessee and referred to in this order. All the submissions made above are not borne out of the record of AO/TPO/DRP. In these circumstances, we deem it fit and proper to remand this issue also to the TPO/AO for fresh consideration in the light of submissions made by the assessee before us. The TPO will determine the ALP afresh keeping in mind the submissions as made above. We make it clear that in the event of assessee being held to be the owner of Unibic trademark, there can be no addition on account of any deemed international transaction of incurring of AMP expenses. We also make it clear that the issue whether incurring of AMP expenses can be considered as international transaction in the facts and circumstances of the present case is left open for consideration, if the adjudication of that issue becomes necessary.
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