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2020 (12) TMI 1111 - AT - Income TaxTP Adjustment - international transactions resulting from advertisement, marketing and sales promotion expenses (‘AMP expenses’) - Benchmarking AMP expenses applying RPM - Haier expenditure on free gifts is in the nature of providing small three gifts like Pens, T-shirts, Caps, Jackets etc. along with the product. Such gifts are purchased from local market and the name of the assessee company is imposed on it through third party printing agencies. Diwali and festival gifts given by the assessee to its employee’s dealer etc. HELD THAT:- In the present case assessee is not conducting any band promotion, but in fact is engaged in the business of distribution of consumer durable products - In present case the Revenue has not pointed out as to how the Resale Price Method will not be applicable. This is not disputed by the Revenue as the TPO in order dated 21.10.2011 considered Vivek Limited as appropriate comparable for benchmarking AMP expenses, applying Bright Line Test. The TPO considered Vivek Limited as comparable as it is trader/re-seller of home appliances and does not own any brand. But since, the bright line test is not appropriate as held by the Hon’ble Delhi High Court [2015 (3) TMI 580 - DELHI HIGH COURT] we further examine that the element of adding value to the goods by incurring AMP expenditure creating market intangibles and enhancing brand value of the product is missing in present assessee’s case. From the perusal of the records it is found that after excluding selling and distribution expense of ₹ 10,18,50,415, the adjustment works out to ₹ 2,85,10,127/- - From the perusal of the records it is found that after excluding selling and distribution expense of ₹ 10,18,50,415, the adjustment works out to ₹ 2,85,10,127. - Appeal of the assessee is partly allowed.
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