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2020 (1) TMI 912 - AT - Income TaxTP Adjustment - AMP expenses addition - international transaction - HELD THAT:- In Maruti Suzuki India Ltd. X [2015 (12) TMI 634 - DELHI HIGH COURT] held that “there being no international transaction on AMP spend with an ascertainable price, neither substantive nor machinery provision of Chapter X were applicable to the transfer pricing adjustment exercise. In Bausch & Lomb Eyecare (India) (P.) Ltd. [2015 (12) TMI 1332 - DELHI HIGH COURT] held that “where existence of an international transaction involving AMP expense with an ascertainable price is unable to be shown to exist, even if such price is Nil, Chapter X provisions cannot be invoked to undertake a TP adjustment exercise. In Whirlpool of India Ltd. [2015 (12) TMI 1188 - DELHI HIGH COURT] held that “where revenue has been unable to demonstrate by some tangible material that there is an international transaction involving AMP expenses between Indian subsidiary and foreign parent, revenue cannot proceed to determine ALP of AMP expenses by inferring existence of an international transaction based on bright line test. In Honda Siel Power Products Ltd. [2015 (12) TMI 1333 - DELHI HIGH COURT] held that “when assessee is carrying on business as independent enterprise and is incurring AMP expenses for its own benefit and not at the behest of AE, hence benefit of creation of marketing intangibles for foreign AE on account of AMP expenses can at best said to be incidental”. In view of the principles laid down the in the above decisions, the AMP spend is not an international transaction in the absence of an arrangement between the taxpayer and the AE. In the instant case there cannot be said to be any international transaction between the appellant and the AE for incurring the AMP expenditure. Further, we find that on a TNMM basis, the appellant’s margin after including these costs is higher than comparables and hence, no adjustment on AMP expenses can be made when the primary international transactions have been accepted by the TPO to be at arm’s length. We delete the transfer pricing adjustment made by the AO - Decided in favour of assessee.
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