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2023 (12) TMI 771 - HC - Income TaxTP adjustment - Advertising, Marketing and Promotion (AMP expenses) by applying the Bright Line Test was sustainable - international transaction or not? - HELD THAT:- Tribunal ruled in AY 2008-09 that the excessive AMP expenditure did not fall in the category of an international transaction and, therefore, the adjustment made qua the same was unsustainable in the eyes of law. This conclusion was based on a finding of fact that the respondent/assessee was primarily engaged in manufacturing operations and that AMP expenditure had been incurred to benefit its own operation, and not for promoting an associated enterprise (AE). Tribunal also disapproved the TPO’s approach of applying the Bright Line Test in benchmarking the AMP expenses. This view was based on a judgment rendered in Sony Ericsson India Pvt. Ltd. V. CIT [2015 (3) TMI 580 - DELHI HIGH COURT] and Maruti Suzuki India Ltd. v. CIT [2015 (12) TMI 634 - DELHI HIGH COURT] Tribunal also highlighted the fact that before ascertaining the arms’ length price on an international transaction concerning AMP expenditure, the appellant/revenue would have to discharge the onus that an international transaction had occurred between the assessee and the associated enterprise. This view was also founded on the decision of the coordinate benches of this court rendered in Bausch & Lamb Eye Care (India) Pvt. Ltd. [2015 (12) TMI 1332 - DELHI HIGH COURT] and Honda Siel Power Products Ltd. v. Dy. CIT [2015 (12) TMI 1333 - DELHI HIGH COURT] Tribunal both in the period in issue i.e., AYs 2010-11, and in 2008-09, has remitted the matter to the file of the Assessing Officer (AO).We are also informed that the appellant/revenue has lodged an appeal against the decision rendered by this court in Sony Ericsson [2015 (3) TMI 580 - DELHI HIGH COURT] Therefore, this appeal is closed as according to us, a substantial question of law arises for consideration by this court.
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