TMI Blog2017 (7) TMI 1188X X X X Extracts X X X X X X X X Extracts X X X X ..... tio for promoting their product. In that view of the matter, unless the amount which was found to be not genuine merely because excess amount has been spent on advertisement, will not not be a ground for disallowing the expenses. Decided in favour of assessee Adjustment made on account of Arm’s Length interest to be charged by the assessee on the outstanding receivables from its AEs - Held that:- As relying on Indo American Jewellery [2013 (1) TMI 804 - BOMBAY HIGH COURT] there is complete uniformity in the act of the apellant in not charging interest from both AE’s and non-AEs and adjustment in realization to notional interest on outstanding receivable cannot be made. - D.B. Income Tax Appeal No. 40/2017 And D.B. Income Tax Appeal N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion (AMP) expenditure was not an international transaction even though the assessee was performing Development, Enhancement, Maintenance, Protection and Exploitation (DEMPE) functions for its AE and doing activity of brand building? 3. Whether the Tribunal was legally justified in deleting the addition of ₹ 6,87,53,869/- (In appeal no. 39/2017) and ₹ 6,62,31,158/- (In appeal no. 40/2017) made on account of Arm s Length service fee payment to its AEs specifically when the assessee failed to submit cost benefit analysis for payment of services, proof for requisition of services, proof of availing services and comparison about the cost of services if these services were purchased in India itself? 3.1 Question No.4 of appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the books of accounts and the auditor also qualified in the report stating these to be one time expenditure? 4. Counsel for the appellant has taken us to the order of the tribunal and contended that tribunal has wrongly relied upon the decision against which the SLP is pending and advertisement expenses which are incurred are disproportionate to the turnover or income. 4.1 In that view of the matter, the tribunal has committed serious error in reversing the finding of AO as well as CIT(A). 4.2 Counsel for the appellant has taken us to the details of the judgment of tribunal and further contended that the issue regarding the chargeable interest and adjustment of ₹ 80,95,948/- made on account of Arm s Length Interest, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In that view of the matter, on issue no.1 2, we are of the view that the tribunal has not committed any error. The issues are answered in favour of the assessee. 6.4 Question no.4 in another appeal being appeal no.40/2017 in view of the facts which are recorded by the tribunal which reads as under:- Briefly the facts of the case are that during the FY 2008-09, the Appellant had exported finished goods to its AEs amounting to ₹ 28,57,16,513. In the course of assessment proceedings, the TPO had considered the delay in collection of the receivables from the AEs (on account of export of finished goods) as an extension of the credit/loan facility to the AEs. On the outstanding receivables, the TPO proposed to charge a notional i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the transactions done by the AE in the form of credit allowed to non-AEs. In the instant case where the assessee is not charging any interest from AE as well as non-AEs then the only difference between the two transactions which can be considered is average period allowed alongwith outstanding amount to AE and non-AEs. The Revenue has not brought any material on record to suggest that the average period in realization of the export proceedings is at variance and vastly different. Further it is noted that the Co-ordinate Bench in the case of Bousch Lomb Eyecare (India) Pvt. Ltd. (supra) wherein the identical issue was raised and the contentions regarding the amendment of explanation to section 92B was also raised, has followed th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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