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ACIT Versus Seagram Manufacturing Pvt. Ltd. (Now Pernod Richard India Pvt. Ltd.) And Vice-Versa

2016 (6) TMI 493 - ITAT DELHI

Transfer pricing adjustment - determination of cost incurred by assessee towards marketing support service - whether the cost reimbursed to assessee by its AEs is to be included in the cost base for determining the NCP of assessee or not? - Held that:- in order to bring the tested party and comparables at level playing field, it is necessary that reimbursed cost should be considered in the cost base as well as part of income so as to neutralize any variation in the cost incurred by assessee towa .....

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various agencies which were to conduct or organize these events. He has observed that research was also conducted on behalf of Seagram Martell, findings for which were communicated by Mr. Aditya Gooptu to Seagram Martell. In order to avoid repetition, we are not referring to the detailed activities performed by assessee noticed by ld. TPO, which we have reproduced earlier, while considering the TPO’s findings. It would suffice to observe that assessee played a vital role in all the activities do .....

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see company on account of transit shortages - Held that:- Respectfully following the decision of Hon’ble Delhi High Court in assessee’s own case, we restore the matter to the file of AO to pass the order in terms of the observations made by Hon’ble Delhi High Court noted that the AO shall allow the actual transit breakages for A Y 2001-02 as revenue expenditure consistent with the settled legal position. The Assessees would also be permitted to get the benefit of the reversal of the provision fo .....

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interest under the head “business income” and the balance interest is to be confirmed as income from other sources, as assessee has not furnished any details. In terms of aforementioned observations this ground is partly allowed for statistical purposes.

Allocation of expenses to Marketing support Service segment and also for including the reimbursement of expenses as cost base and also for the income of this segment for computing the NCP of this segment confirmed

Loss on .....

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. (2015 (7) TMI 560 - ITAT DELHI), holding that the brand expenses were in revenue field and contributed towards profit earning process of the assessee, dismiss both these grounds raised by revenue - ITA nos. 4783 & 4784/Del/2007 And ITA nos. 4779 & 4780/Del/2007 - Dated:- 12-4-2016 - SHRI S.V. MEHROTRA : ACCOUNTANT MEMBER AND SHRI SUDHANSHU SRIVASTAVA : JUDICIAL MEMBER For the Petitioner : Shri Deepak Chopra Adv., Mrs. Rashi Khanna Adv. And Ms. Neha Singh Adv. For the Respondent : Shri A.M. Gov .....

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Ltd. in the year 1994. In the relevant assessment year under consideration, it was engaged in the business of blending, bottling and trading of Indian made foreign liquor (IMFL). The liquor was bottled and sold within India through government agencies and private distributors and also exported out of India. The AO had made a reference u/s 92CA(1) to Transfer Pricing Officer ( TPO ) to determine the Arm s length price ( ALP ) in relation to following international transactions with Associated En .....

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gram Netheriands Antilles N.V. 15, Interest free loan granted in earlier Nil Nil Pieterman, Netherlands, Antilles years Seagram Co. Ltd. Canada, 1430, Peel Street, Canada H3A 159. Sale of cotton flannel 4,68,21,889/- 4,68,21,889/- 3. Ld. TPO accepted the ALP as determined by assessee in regard to purchase of raw-material, interest free loan granted in earlier years and sale of cotton flannel. However, he did not accept the ALP determined by assessee in regard to marketing support services. Ld. T .....

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markets in India; - Canvassing orders for the products; - Providing administrative assistance to Seagram Martell in product advertising, addressing customer grievances regarding features and standards of the products, organizing and conducting of various promotion/ marketing events on behalf of Seagram Martell; - Providing assistance and support to Seagram Martell in the collection and follow up of payments due. 4. It is further noticed by ld. TPO that assessee did not have authority to conclude .....

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ent that in addition to the functions noted earlier, the assessee was also performing following functions: (a) Negotiations of terms and conditions and credit limit with customers (b) obtaining orders from customers and forwarding them to Seagram Martell with draft proforma invoices containing proposed terms and conditions including prices, based on confirmations from the customers; (c) Advising Seagram Martell on delivery of goods. 6. Ld. TPO examined the economic analysis carried out by assess .....

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e cases was 6.11% using data for 3 years. The profit earned by assessee from marketing support service activities, segmented out of the consolidated account by the company management, was 13.25%, which was computed as under: Income Sales ₹ 1501610 Operating income [A] ₹ 1501610 Expenses Cost of traded goods Personnel expenses ₹ 1081023 Administration and selling expenses ₹ 244866 Operating expenses (B) ₹ 1325889 Operating profit ©=(A)-(B) ₹ 175721 Net cos .....

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imed that its market support services function was within ± 5% of the average of NCPs of comparable cases. 10. Ld. TPO examined the assessee s computation and noted following two defects in the economic analysis done by the assessee, which are reproduced hereunder:- 7.0 Two serious defects were noted in the economic analysis done in the T.P. Report to justify the arm's length price of market support service activity: . (a) The expenditure in respect of marketing support services segme .....

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rt of "international transaction of market support services" in Form 3CEB. However, while preparing the segmented accounts, the Company Management (page 28 of the T.P. Report), excluded these reimbursements both from the receipts and the expenditure. For NCP Ratio calculation also, reimbursed expenses are not included in the "cost". 11. Ld. TPO gave opportunity to assessee, observing in para 8 as under: 8.0 During the proceedings u/s 92CA. vide Order Sheet entry dt. 17.01.200 .....

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excluded to calculate NCP of SMPL. Assessee was also asked to furnish total sales of liquor achieved by SMPL during F.Y. 2001-02 separately for India and SAARC countries. It was also asked as to why the commission was agreed to be received as a fixed small sum and not as a percentage of sales. as is the usual practice for independent commission agents. Details of expenses incurred on market support services of ₹ 13.25.889/- and reimbursed expenses of ₹ 4.80.71.661/- were also called .....

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ere coordinated by one employee spending full time efforts (namely. Mr. Surjit Verma) and another employee spending minimal part of this time (Mr. Aditya Gooptu). The role of assessee was neither to undertake full-fledged marketing/ distribution activities nor to operate as a sales agent of Seagram Martell. Hence it was claimed that the fixed fee of US $ 2500 per month for the limited activities undertaken by assessee was justified, which covered personnel costs, communication expenses and a pro .....

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expenses incurred by SMPL in providing the aforesaid administrative assistance. SMPL is not in the business of providing advertisement or sales promotion services to unrelated parties. The benefit (of SMPL incurring these expenses and obtaining reimbursement of the same), if any, to Seagram Martell is no more than indirect or remote in nature. Any benefit arising to Seagram Martell is purely incidental and not intentional so as to warrant any markup on the costs so incurred by SMPL. Further, the .....

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agent or intermediary in the provision of services, it is important in applying the cost-plus method that the return or mark-up is appropriate for the performance of services themselves. In such a case, it may not be appropriate to determine arm's length pricing as a mark-up on the cost of services but rather on the costs of the agency function itself, or alternatively, depending on the type of comparable data being used, the mark-up on the cost of services should be lower than would be app .....

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essee to inform as to how the sales were made by Seagram Martell in India before entering into representation agreement with assessee. 15. The assessee pointed out that Seagram Martell commenced sales to duty free shops and other govt. approved vendors etc. from August, 1999. For the period up to March, 2000 (approximately 3 months), Seagram Martell directly coordinated the sales with the said customer. The assessee furnished following details of expenses incurred for market support services: Su .....

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iture on communication. He further pointed out that assessee had not included any expenditure on rent, wear and tear of fixed assets, postage, local conveyance and petrol, power and fuel, bank charges etc. incurred towards marketing support activities. 17. The assessee provided the detail of reimbursement of expenses, which were as under: Particulars Amount (in Rs.) CR open Golf Championship 15,564,227 Polo Championship 7,746,195 Promotions 7,527,981 Display Material 4,221,607 Other Events 2,494 .....

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ee to furnish the details of sales achieved by Seagram Martell during FY 2001-02 for India and other SAARC countries. The assessee pointed out that since the activities of assessee were limited to providing certain marketing support services, the assessee had not maintained any comprehensive record of sales made by Seagram Martell. 20. The assessee only provided limited details in this regard pointing out that Seagram Martell had under gone a major reorganization after the split and subsequent a .....

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as recorded. The AO has in detail discussed the allocation of expenses for marketing support service in paras 10 to 11.6 and has finally concluded that following expenses had to be allocated towards marketing support services: Salary Verma 8,42,180/- Salary Gooptu 7,96,143/- Travel expenses Verma 1,17,590/- Travel expenses Gooptu 4,24,253/- Communication 42,52,114/- Finance Charges 4,44,088/- Rent 3,00,000/- Conveyance 2,50,000/- Depreciation 1,00,000/- Power and fuel 1,25,516/- Miscellaneous 1, .....

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d coordinating various activities and events financed through . reimbursed expenses. Mr. Gooptu coordinated with advertising agency for organization of Chivas Regal Golf & Polo activities in India. Research was conducted on behalf of Seagram Martell. findings for which were communicated by Mr. Gooptu to Seagram Martell. Mr. Verma played a role in selection of the venues. invitees for the Golf & Polo events. Both Mr. Gooptu and Mr. Verma were fully involved in these events. Mr. Verma was .....

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de by assessee definitely required a mark up on the cost. He pointed out that independent parties dealing at arm s length would not work for free. He pointed out that the cost incurred by assessee in turn represents the magnitude of effort of assessee also. The reimbursed cost, therefore, should have been included in the cost to calculate NCP ratio and a mark up on this cost was definitely needed to be earned by assessee. He referred to assessee s explanation with reference to para 7.36 of the O .....

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cordingly, he concluded that reimbursed expenses should be taken as a part of cost to be used for calculating NCP ratio. He, accordingly, calculated the NCP ratio for the marketing support services as under: Market Support Services Fee ₹ 13,85,339/- Reimbursement for Market Support Services ₹ 4,80,71,661/- Exchange gain ₹ 61,093/- Operating income (A) ₹ 4,95,18,093/- Less: Expenses allocated above ₹ 7751884/- Reimbursed expenses ₹ 4,80,71,661/- Total expenses .....

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cost for market support services function of the tested party SMPL. Profit = ₹ 55823545 ×5 0.0799 = ₹ 44,60,301 Amount receivable using NCP of 7.99% = ₹ 55823545+Rs. 44,60,301 = ₹ 6,02,83,846 95% of the above = ₹ 57269654 95% of the amount receivable using NCP of 7.99% is more than the amount actually received i.e. ₹ 4,95,18,093/-. The Arm s length price of the Market Support Services receipts is therefore ₹ 6,02,83,846. The difference works out to .....

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gn exchange fluctuation - Provision for professional expense - Provision for transit breakages - Difference in Arm s length price u/s 92CA - Expenditure disallowed on Brand Promotion. - Expenditure on advertisement & sales promotion, treated as capital expenditure. 27. The AO also computed the interest income of ₹ 98,85,207/- , returned by assessee as business income under the head income from other sources . 28. Ld. CIT(A) has partly allowed the assessee s appeal. Being aggrieved, bot .....

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s and could not be sustained. 1.2 That the Ld. CIT(A) erred in concluding that the NCP margin of the appellant worked out to -3.35% as against the NCP margin of7.99% as taken by the TPO. 1.3 That the Ld. C!T(A) erred in law in not granting the variation of 5% as permitted under the proviso to section 92C(2) of the Act. 2. That the Ld. CIT(A) erred on facts and in law in sustaining the disallowance of ₹ 50,540 being provision for professional charges. 3. That the Ld. CIT(A) grossly erred in .....

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preciation. 5. That the Ld. CIT(A) erred in law in sustaining the addition of ₹ 5,159,990 being provision of transit breakages in order to compute book profit under section 115JA of the Act. 6. That the Ld. CIT(A) erred on facts and in law in sustaining the treatment of ₹ 9,885,207 as 'income from other sources' as against 'business income' of the appellant. 7. That the Ld. CIT(A) erred in sustaining the levy of interest under section 234B and D of the Act . 30. At th .....

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ement expenses 48071661 0 0 4,80,71,661 2 Communication expenses 42,52,144 1,05,06,755 52,534 5,26,388 3 Finance charges 4,44,088 33,94,492 16,972 0 4 Rent 3,00,000 1,84,65,610 92,328 92,328 5 Conveyance and local travel 2,50,000 3,18,18,476 1,59,092 1,59,092 6 Depreciation 1,00,000 1,96,10,713 98,054 98,054 7 Power and fuel 1,25,616 12,93,984 6,470 6,470 8 Miscellaneous 1,00,000 1,88,04,901 94,025 1,00,000 9 Salary expense of Mr. Verma 8,42,180 - 8,42,180 10 Travel expenses of Mr. Verma 1,17,59 .....

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ispute the allocation of expenses as determined by ld. CIT(A) in regard to various expenses from sl. No. 2 to 12 but he vehemently opposed the inclusion of reimbursement of expenses while determining the cost incurred by assessee in regard to marketing support service. 33. Ld. counsel referred to page 295 of the PB, wherein the representation agreement dated 1.7.2000 is contained and referred to the following recital of the agreement: (b)SML possesses the necessary expertise, know-how and the re .....

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vassing orders for the Products; 1.2.3 Providing administrative assistance to the Company in Product advertising, addressing customer grievances regarding features and standards of the Products providing clarifications to customers and prospective customers in the Territory, organization and conduct of various promotion/ marketing events and liaison with third parties such as advertising agencies, event managers and other sponsors if any, on behalf of the Company without in any way having the au .....

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s; 1.2.7 Based on the confirmation received from the customers, advising Company on delivery of goods while retaining the original invoice with itself; 1.2.8 Providing assistance and support to the Company in the collection and follow up of payments due and outstanding from customers in the Territory; and 1.2.9 Providing any other assistance as may be mutually agreed between the parties hereto. …….. 6.3. The Company shall directly bear all expenditure to be incurred in respect of t .....

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r this Agreement. 35. Ld. counsel submitted that when cost has already been allocated for carrying out marketing support service by assessee, then how reimbursement can be allocated to cost base. Ld. counsel relied on the decision of ITAT Delhi Bench in the case of DCIT Vs. Cheil Communications India (P) Ltd. [2011] 11 taxmann.com 205 (Delhi), holding as under: The only question that fell for consideration was with regard to the method of computing profit/TC margin whether on gross basis as done .....

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ccount, which had been duly audited by the auditor. The assessee had computed the margin of operative profit on the total cost on the basis of net revenue by way of mark-up received from the associate concern. The payment made by the assessee to third party vendor/media agencies for and on behalf of the principal had not been included in the total cost for determining the profit margin, though , on the other hand, the Tp75hacrmcruded the Payment reimbursed by the assessee's associate enterpr .....

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s or AEs. It was, thus, clear that the assessee's business was not sale of advertising slots to its customers or associate concern. For performing the functions for and on behalf of AEs, the assessee was remunerated by its AEs on the basis of a fixed commission/charges based on expenses or cost incurred by the assessee for release of a particular advertisement. It was also to be noted that advertising space ( be it media, print or outdoor), had been let out by third party vendors in the name .....

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was, thus, clear that the assessee had not assumed any risk on account of non-payment by its customers or AEs. At this stage a useful reference may be made to ITS 2009 Transfer Pricing Guidelines accepted by the GECD where it is laid down that when an AE is acting only as an agent or intermediary in the provision of service, it is important in applying the cost plus method that the return or mark-up is appropriate for the performance of an agency function rather than for the performance of the s .....

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ark-up and to apply a mark-up only to the costs incurred by the intermediary in performing its agency function. 36. Ld. CIT(DR) referred to para 9.4.4 of ld. CIT(A) s order and pointed out that he has given additional reasons for accepting the view expressed by ld. TPO. He submitted that ld. CIT(A) has, inter alia, pointed out that perusal of some of the advertising bills revealed that the assessee, while making payments collected TDS, obtaining TAN, filing TDS returns and all other consequentia .....

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ration of facts, is whether the cost reimbursed to assessee by its AEs is to be included in the cost base for determining the NCP of assessee or not. The claim of assessee is that assessee was getting advances from its AEs for performing certain functions on behalf of AEs only. These functions included organization of various functions such as Golf Championship, Polo Championship sponsored by AEs. The Marketing support services implies that assessee is providing support services for building up .....

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such circumstances, in order to bring the tested party and comparables at level playing field, it is necessary that reimbursed cost should be considered in the cost base as well as part of income so as to neutralize any variation in the cost incurred by assessee towards carrying out marketing support services. Admittedly, at first place assessee has incurred all these expenses and then got reimbursed by its AEs. All risks incidental to these expenses were at assessee s account and not AE. Ld. C .....

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o avoid repetition, we are not referring to the detailed activities performed by assessee noticed by ld. TPO, which we have reproduced earlier, while considering the TPO s findings. It would suffice to observe that assessee played a vital role in all the activities done to promote sales of Seagram Martell Duty Free Ltd. in India and the meager amount of US$ 2500 p.m. was not at all justified considering the services rendered by assessee. We could appreciate assessee s contention of not including .....

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rmediary between the AE and third party in order to facilitate placement of advertisement. No risk was borne by assessee. However, in the present case, assessee was rendering overall market support Services to AE and only part of the expenses were reimbursed. 39. We are further in agreement with the following findings of ld. CIT(A): In view of the foregoing analysis, I am inclined to agree with the findings of the TPO that the reimbursed expenses should be part of the cost base of the appellant .....

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why a separate treatment is to be given to the reimbursed amounts in the segmented accounts as both these expenses aim at achieving similar results. In any case, the reimbursed expenses did impact the sales of the AE positively. (iii) The appellant has been using the same agencies for the sales promotion purposes both for the domestic segment as well as for the AE segment. Credits are extended to SMPL on its own credibility or standing and not on the basis of the credibility of the AE. This mak .....

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circumstances, the appellant is entitled to get a mark-up on the actual cost incurred inclusive of reimbursed expenses. (v) Under TNMM, the appropriate cost base is to be taken into account while determining the arm's length nature, of compensation received for discharging a particular function. Exclusion of a relevant cost item would distort the bench marking analysis vis-a-vis the results of the comparables. No such exceptions have been brought out by the appellant for the comparables. 40. .....

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e reversed. Accordingly, the provision was created on a scientific basis and on the past experience. The assessee relied on the decision of Hon ble Supreme Court in the case of Bharat Earth Movers 112 Taxman 61. The AO did not accept the assessee s contention, inter alia, observing that there was no certainty that if a breakage or shortage had occurred in the past it will occur in this year also. 42. He further observed that the assessee company had adjusted an amount of ₹ 44 lakhs on acco .....

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ITA nos. 898/2009 & others dated 6.10.2015, wherein the Hon ble High Court has observed as under: 25. The question is not whether on account of the reversal of the provision made by the Assessees on the first day of the following year, there would be no loss as such to the Revenue. The question is whether making a provision for transit breakages would be allowable as a business expenditure. In light of the law explained in the above decisions, the Court is satisfied that the view taken by t .....

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re allowable as revenue expenditure in the accounting year in which such breakages occur. 27. Consequently, the question framed is answered in favour of the Revenue and against the Assessees. 28. It is clarified that while giving an appeal effect to this order, the AO shall allow the actual transit breakages for A Y 2001-02 as revenue expenditure consistent with the settled legal position. The Assessees would also be permitted to get the benefit of the reversal of the provision for transit break .....

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round no. 5 becomes academic, wherein the assessee has assailed the directions of ld. CIT(A) in sustaining the addition of ₹ 51,59,990/-, being provision of transit breakages in order to compute book profit u/s 115JA of the Act. 47. Ground no. 6: Brief facts apropos ground no. 6 are that the AO considered the interest income returned by assessee under the head business income as income from other source. Before ld. CIT(A) it was submitted by the assessee that the issue is covered in its fa .....

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remarks in the body of the assessment order. He confirmed the AO s action. 49. We have considered the submissions of both the parties and have perused the record of the case. The Tribunal s order for AY 1999-2000 is contained at pages 116 to 121 of PB, wherein Tribunal in para 5 has observed as under: 5. The remaining issue in appeal for assessment year 1998- 99 is I regard to treating the interest income of ₹ 3,40,680/- earned on loans given to employees, as income from other sources agai .....

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the interest income earned only on loans given to employees were considered. Therefore, we direct the assessee to furnish the details of interest earned on loans given to employees before AO and the AO will treat the said interest under the head business income and the balance interest is to be confirmed as income from other sources, as assessee has not furnished any details. In terms of aforementioned observations this ground is partly allowed for statistical purposes. 51. Ground no. 7: Chargi .....

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rence in Arm's Length Price determined by the TPO and that taken by the assessee." 2." On the facts and in the circumstances of the case the Ld. CIT (A) erred in law and on facts in deleting the addition of ₹ 63,60,000/- made by the AO on account of foreign exchange fluctuation loss." 3." On the facts and in the circumstances of the case the Ld. CIT (A) erred in law and on facts in deleting the disallowance of ₹ 3,11,81,808/- representing 10% of the brand expe .....

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rt Service segment and also for including the reimbursement of expenses as cost base and also for the income of this segment for computing the NCP of this segment. Therefore, this ground stands dismissed. 54. Brief facts apropos ground no. 2 are that assessee had claimed loss of ₹ 50,12,108/- on account of foreign exchange rate fluctuation. AO examined the details and found that actual amount provided on restatement of foreign currency loan was ₹ 63,60,000/- and the sum of ₹ 50 .....

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vious year. The assessee relied on the submissions made for AY 2001-02 and also son the order of ITAT in its own case for AY 1998-99 and 1999-2000. It was further pointed out before him that even for AY 2001-02 the CIT(A) had allowed its claim in this regard. The AO, however, following the assessment order for AY 2001- 02, denied the claim of assessee, inter alia, observing that the order of ITAT had been challenged in appeal before the Hon ble High Court. 55. The Ld. CIT(A), inter alia, followi .....

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re, respectfully following the decision of Hon ble Jurisdictional High Court in the case of Woodward Governor India Pvt. Ltd. (supra), dismiss this ground of appeal, holding that the loss incurred by the assessee was a fate accompali and not a notional one. 58. Ground nos 3 & 4: The AO noticed that in the P&L A/c the assessee had claimed sales and marketing expenses amounting to ₹ 51,61,92,453/- as against ₹ 39,02,30,608/- in the immediately preceding year. He noted that the .....

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ny s products. The assessee submitted that the expenditure on brands did not provide enduring benefit to the company and was allowable as revenue expenditure. It was explained that the company brand was a primary source of its competitive advantage and also a valuable strategic asset. Further, brands create an identification for company s products in a brand conscious market and as such these were an integral part of asessee s business and ensure customer loyalty/ satisfaction which naturally re .....

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d 10% of the expenses claimed by the assessee under the head brand expenses and accordingly made disallowance of ₹ 3,11,81,808/-. He further held that part of such expenditure on advertisement and sales promotion becomes capital in nature as it leads to creation of a tangible asset being goodwill, reputation and credibility. He, therefore, made a further disallowance of ₹ 3,11,81,808/- being 10% of such expenditure. 60. Ld. CIT(A) following the decision of Hon ble Supreme Court in th .....

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. He relied on the decision of Hon ble Calcutta High Court in the case of CIT Vs. Berger Paints (India) Ltd. 254 ITR 503 and held that brand expenses did facilitate the profitable operations of the assessee s business. 61. At the time of hearing ld. counsel for the assessee submitted that the ITAT in the case assessee s sister concern has held that the expenses on advertisement and sales promotion are allowable as revenue expenditure u/s 37(1). 62. We have considered the rival submissions and ha .....

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Y 2008-09. In the profit and account, the appellant debited an amount of ₹ 30,18,52,870/- under the head advertising, sales promotions and rebates. Out of the same the appellant had shown expenses of ₹ 10,16,10,577/- as brand expenses. The appellant explained that these expenses were incurred for advertising, sales promotion, cost and distribution etc. The Assessing Officer held that the brand expenses were incurred for enhancing the image of the brand and as such it was resulting in .....

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ture was in the nature of advertising and sales promotion of the products being sold by the appellant and the expenditure has not resulted in creation of new asset. The test of enduring benefit cannot be alone applied to determine whether the expenditure is revenue or capital. He placed reliance on the following decisions: 1. Empire Jute Company, 124 ITR 1 (SC), 2. CIT Vs. Berger Paints (India) Ltd., 254 ITR 503, (Cal.), 3. CIT Vs. Vs. Adidas India Marketing Pvt. Ltd., 195 Taxman 256 (Del.), 4. .....

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ann.com 133 (Del.), 12. CIT Vs. Monto Motors Ltd., [2012] 19 taxmann.com 57 (Del.), 13. CIT Vs. Salora International Ltd., [2009] 308 ITR 199 (Del.) 10.2 On the other hand, learned DR placed reliance on the order of the Assessing Officer. 10.3 We have heard the rival submissions and perused the details of the expenditure incurred placed at pages no. 76 to 79 of the paper book. From the details, it is clear that the expenditure is incurred only towards sales promotion and on advertisement issued. .....

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the customers remain attracted and do not forget the product and its qualities. The advertisements published/displayed may not be of relevance or significance after lapse of time in a highly competitive market, wherein the products of different companies compete and are available in abundance. Advertisements and sales promotion are conducted to increase sale and their impact is limited and felt for a short duration. No permanent character or advantage is achieved and is palpable, unless special .....

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chinery in motion or not for earning profits. " 10.4. Following the above ratio laid down by the Hon'ble Jurisdictional High Court, we allow this ground of appeal filed by the assessee. 10.5 Hence the appeal filed by the assessee company is allowed. 63. As no distinguishing feature has been brought on record by the department, respectfully following the order of the ITAT in the case of M/s Seagram Distilleries Pvt. Ltd. (supra), holding that the brand expenses were in revenue field and .....

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961 (Act). 1.1 That the Ld. CIT(A) failed to appreciate that the apportionment of expenses done by the TPO were without basis and could not be sustained. 1.2 That the Ld. CIT(A) erred in concluding that the NCP margin of the appellant worked out to -1.41 % as against the NCP margin of 8.05% as taken by the TPO. 1.3. That the Ld. CIT(A) erred in law in not granting the variation of 5% as permitted under the proviso to section 92C(2) of the Act. 2. That the Ld. CIT(A) erred on facts and in law in .....

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was purely contingent in nature. 4. That the Ld. CIT(A) erred in law in sustaining the addition of ₹ 782,854 being provision of transit breakages in order to compute book profit under section 115JA of the Act. 5. That the Ld. C1T(A) erred in sustaining the levy of interest under section 234B and D of the Act. 66. Ld. counsel for the assessee did not press ground no. 2. Hence, ground no. 2 stands dismissed being not pressed. 67. Ground no. 1: Identical ground has been taken by the assessee .....

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/2009 & others dated 6.10.2015, 3 we have restored the matter to the file of AO to pass order in terms of the observations made by Hon ble Delhi High Court (supra). Ground no. 3 is allowed for statistical purposes. 69. Ground no. 4: Identical ground has been taken by the assessee as ground no. 5 in AY 2002-03. In AY 2002-03 we have rejected this ground being of academic interest only. Facts being identical herein also adopt the same course. Ground is dismissed. 70. Ground no. 5: Charging of .....

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48/- out of total disallowance of ₹ 73,84,301/- made by the AO on account of difference in Arm's Length Price determined by the TPO and that taken by the assessee." 2. " On the facts and in the circumstances of the case the Ld. CIT (A) erred in law and on facts in deleting the addition of ₹ 7,00,292/- made by the AO on account of foreign exchange fluctuation loss." 3. " On the facts and in the circumstances of the case the Ld. CIT (A) erred in law and on facts .....

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T (A) erred in law and on facts in deleting the disallowance of commission of ₹ 76,90,395/-, made by the AO on account of commission paid to M/s Sunrise Bottles. 73. Ground nos. 1 to 4 taken by the revenue in AY 2003-04 are identical(excepting quantum) to ground nos. 1 to 4 as taken in AY 2002-03. For the very same reasons herein also we dismiss ground nos. 1 to 4. 74. Ground no. 5: Brief facts are that assessee had claimed commission on sales at ₹ 1,46,76,978/-. The AO noticed that .....

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