TMI Blog2016 (4) TMI 1139X X X X Extracts X X X X X X X X Extracts X X X X ..... a distributor. Recently, the Hon’ble Delhi High Court, subsequent to the said decision of Maruti Suzuki India Ltd. (supra), examined this aspect and applied the same principle to the distribution business also in the cases of Bausch & Lomb Eyecare (India) Pvt. Ltd. vs. A.C.I.T. [2015 (12) TMI 1332 - DELHI HIGH COURT] and C.I.T. & Ors vs. Whirlpool of India Ltd. [2015 (12) TMI 1188 - DELHI HIGH COURT]. These decisions of the Hon’ble Jurisidctional Court which are applicable to the facts of the present case were not considered by the T.P.O. and the D.R.P. since these were not available to them. We, therefore, by considering the totality of the facts and the ratio laid down by the Hon’ble Delhi High Court in the aforesaid judicial pronouncemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssing Officer (AO) / Hon ble Dispute Resolution Panel (DRP) erred in computing the total income of the Appellant at ₹ 343,103,020/- as against the returned income of ₹ 129,003,431/-. 2. That the DRP/Ld. Transfer Pricing Officer (TPO) erred in making an adjustment of ₹ 217,399,859/- under section 92CA(3) of the Income Tax Act, 1961 ( the Act ) in respect of the advertising and marketing expenses (AMP expenses) incurred by the Appellant for its own business purposes. Transfer pricing grounds 3. That the Ld. TPO/AO/DRP erred in segregating AMP transaction after having accepted the arm s length price of all other transactions under TNMM and having accepted that the profit margin of the Appellant was within the + ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nty expense made by the appellant with respect to the warranty provision while computing the taxable profits during the financial year. Common ground 11. Ld. AO has erred, in charging interest under sections 234B and 234C of the Act. 12. That on facts and in laws, the Ld. AO erred in holding that the Appellant has furnished inaccurate particulars of income in respect of each item of disallowance/ additions and in initiating penalty proceedings under section 274 read with section 271(1)(c) of the Act. 2. Ground no. 1 and 2 are general in nature and ground no. 12 is raised prematurely so these grounds do not require any comments on our part. 3. Ground nos. 3 to 9 relate to the addition on account of AMP adjustment. Facts re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 71,23,76,838/- 4. The A.O. made the addition of ₹ 71,23,76,838/- on T.P.Adjustment in draft assessment order. During the course of assessment proceedings, the AO also noticed that the assessee claimed a sum of ₹ 82,399/- on account of SAD written off. When confronted to explain the claim, the assessee submitted that the similar disallowance was made in the assessment year 2010-11 which was confirmed by the DRP. The AO therefore, made the similar disallowance for this year also. The AO proposed the draft assessment order and recomputed the income at ₹ 105,03,22,510/- as under :- Total Income as per return filed 33,78,63,271/- Add:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the existence of any mutual agreement or arrangement between the assessee and the A.E. It was stated that the DRP declined to apply the decisions of M/s Maruti Suzuki India Ltd. vs. C.I.T. (Supra) on the ground that it was given in the context of a manufacturer and not a distributor, however, subsequent to the said decision the Hon ble Jurisdictional H.C. in the case of Whirlpool of India vs. DCOT in I.T.A. 228/2015 C.M.No. 5751/2015 order dated 22.12.2015 and in the case of Bausch Lomb Eyecare (India) Pvt. Ltd. vs. A.C.I.T. in I.T.A. No. 643 675/14 order dated 23.12.2015 examined this aspect and applied the same principle to distribution business as well. It was further submitted that DRP and the TPO failed to give any cogent reason ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t which are applicable to the facts of the present case were not considered by the T.P.O. and the D.R.P. since these were not available to them. We, therefore, by considering the totality of the facts and the ratio laid down by the Hon ble Delhi High Court in the aforesaid judicial pronouncements, deem it appreciate to set aside the issue relating to the adjustment on account of AMP to the file of the TPO/AO to be decided afresh in accordance with the law after providing due and reasonable opportunity of being heard to the assessee. 9. The next issue vide ground no. 10 relates to the claim of warranty expenses. The only grievance of the assessee relating to this issue is that the AO has not followed the directions given by the DRP while ..... X X X X Extracts X X X X X X X X Extracts X X X X
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