Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2022 (11) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (11) TMI 981 - HC - Income TaxTP Adjustment - adjustment on account of AMP expenditure - international transaction - Assessee has incurred huge Advertising, Marketing and Promotion (‘AMP’) expenditure with the objective of expanding the reach of the AE’s brand in India, who is the legal owner of the brand - HELD THAT:- It is admitted on record that the contention of the Revenue that there exists an international transaction between the Assessee and its AE, is not based on any agreement executed between the said parties. The sole basis for making this adjustment was a presumption drawn by the TPO that huge AMP expenditure was incurred by the Assessee to expand the reach of its AE’s brand in India. TPO has determined the existence of an international transaction on a matter of a presumption, which runs counter to the decision of this Court in Maruti Suzuki[2015 (12) TMI 634 - DELHI HIGH COURT] Revenue has not brought on record any material to assail the aforesaid finding of the ITAT as regards the absence of any international transaction - In similar facts, the Court in Maruti Suzuki (supra) set aside the order of the TPO/AO, which had determined the AMP expenditure as an international transaction, without any evidence on record and only on the basis of BLT. We are unable to agree with the contention of the learned counsel for the Revenue that in the facts of the present appeal(s), the matter should be remanded to TPO in terms of Sony Ericsson [2015 (3) TMI 580 - DELHI HIGH COURT] - He states that in the said decision this Court held that there exists an international transaction between the Assessee therein, who was a ‘distributor’, and its AE. We are unable to accept the said contention of the learned counsel for the Revenue that since the Assessee herein is a ‘distributor’ for its AE, the corollary of this fact is that there exists an international transaction with respect to AMP expenditure, incurred by the Assessee. In the case of Sony Ericsson (Supra), the finding of this Court that the Assessee(s) therein may have an international transaction with their AE(s) for AMP expenditure was based on the terms of the agreement between the Assessee(s) and their AE(s) in the said case. The issue with respect to deletion of transfer pricing adjustment on account of AMP expenses, determined on BLT method, by the ITAT is squarely covered by the decisions of this Court in the case of Maruti Suzuki (Supra) and Bausch & Lomb [2015 (12) TMI 1332 - DELHI HIGH COURT] - We are, therefore, not inclined to frame any substantial question of law on this issue. The facts and law have been correctly assessed by the ITAT and we therefore, do not find any merits in the appeal and the accordingly, the same are dismissed.
|