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2022 (10) TMI 390 - AT - Income TaxTP Adjustment - international transaction - Advertisement Marketing and Promotional Expenses (AMP) - assessee did not consider incurring of AMP expenses as an international transaction and did not file any transfer pricing analysis benchmarking the AMP expenses - TPO held that there has been an agreement to incur AMP expenses, and therefore, incurring of AMP expenses was an international transaction - HELD THAT:- Tribunal in assessee’s own case for assessment year 2015-2016 [2022 (7) TMI 1329 - ITAT BANGALORE] had held that the assessee is a full-fledged distributor of NIKE product and on examination of royalty agreement, it was held by the Tribunal for assessment year 2015-2016 that there is no clause which mandated incurring of any AMP expenses. It was held by the Tribunal that in the absence of no written agreement exists between the assessee and its AE requiring the assessee to incur AMP expenses, the same cannot be regarded as an international transaction at all. Thus we delete the transfer pricing adjustment made by the TPO on account of AMP expenses incurred by the assessee. Payment of outsourcing commission - additional evidences filed are certain email correspondence to explain the nature of services rendered by NGTPS to the assessee - HELD THAT:- In view of the above order of the Tribunal [2022 (7) TMI 1329 - ITAT BANGALORE] for the assessment year 2015-2016, we restore the matter back to the files of the TPO to consider the issue de novo. The TPO shall analyse the evidence on record and the additional evidence which is now filed by the assessee before the Tribunal to determine whether NGPTS had rendered services to the assessee for receipt of sourcing commission. Reimbursement of expenses - HELD THAT:- As decided in own case for AY 2013-2014 . [2021 (6) TMI 1120 - ITAT BANGALORE] and 2015-2016 [2022 (7) TMI 1329 - ITAT BANGALORE] on the issue of payment of cross charges of expats costs and contractor charges claimed as reimbursements to the parent compan we are of the considered opinion that the TPO has been right in holding thatthe nature of these expenses are such that they cannot be attributed to have been solely and exclusively for the distribution business of the assessee, the claim of the assessee that it had derived tangible benefit from the expenditure has not been substantiated with evidence - there is no evidence or likelihood of any independent entity dealing in similar circumstances bearing such expenditure. We, therefore, uphold the finding in the orders of the authorities below in making the T.P. adjustment and dismiss the grounds raised by the assessee. Disallowance of Trade Samples - HELD THAT:- Respectfully following the aforesaid order of the Tribunal rendered in assessee’s own case for assessment year 2013- 2014 [2021 (6) TMI 1120 - ITAT BANGALORE] we reject grounds 1 to 6. AR, however, submitted that disallowance on purchase of trade samples was also subject matter of TP adjustment by the TPO and to that extent there should be direction to ensure that there is no double taxation of the same income. We accept the prayer of the learned AR and direct the AO / TPO to consider the plea of the learned AR in this regard and allow necessary relief in the event the same income gets doubly taxed. Nature of expenses - Retail Fixtures for Stores - HELD THAT:- We hold that since the facts are identical and the expenditure incurred are with reference to refurbishment of the showroom, we hold that the expenditure claimed by the assessee is on the revenue front. It is ordered accordingly. Interest u/s 244A of the I.T.Act on the refund determined - HELD THAT:- We have heard rival submissions and perused the material on record. We direct the A.O. to examine the issue and follow the directions of the DRP. It is ordered accordingly.
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