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2020 (8) TMI 927 - AT - Income TaxTP Adjustment - benchmark the reimbursement of AMP expenditure by the AE - TPO on the basis of its TP study computed the average ratio of AMP/sales expenditure at 2.29% of comparables vis-à-vis 6.23% of the comparables and proceeded to compute the AMP expenditure - HELD THAT:- Tribunal in taxpayer’s own case in AY 2010-11 [2018 (12) TMI 111 - ITAT DELHI] which is exactly on the identical issue and adjustment on account of AMP expenditure made by the TPO has been found to be not sustainable on the ground that no international transactions held to be involved and that economic/legal ownership of the brand seeking compensation for AMP expenditure is inconsistent with the characterization and business model of the taxpayer and that adjustment on account of AMP expenses is not permissible within the scheme of “Chapter – X”. Even otherwise, adjustment on account of AMP expenses is not permissible within the scheme of “Chapter - X” of the Act as has been held by the Hon’ble Delhi High Court in case of Maruti Suzuki India Ltd. vs. CIT [2015 (12) TMI 634 - DELHI HIGH COURT] We are of the considered view that addition made by AO/DRP/TPO on account of AMP expenses is not sustainable and as such question framed is answered in the negative. 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. Adjustment made by the TPO/DRP/AO by applying the BLT on account of AMP expenses in the absence of international transactions between the taxpayer and AE is not sustainable in the eyes of law, hence ordered to be deleted. Decided in favour of assessee.
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