TMI Blog2019 (2) TMI 1774X X X X Extracts X X X X X X X X Extracts X X X X ..... for Assessment Year 2008-09.[ 2015 (12) TMI 1188 - DELHI HIGH COURT] Disallowance of expenses u/s 37 incurred by assessee on account of alleged advertisement and marketing expenses - HELD THAT:- As the issue relating to nature of AMP expenses being international transaction or not, has been set aside to Ld.AO in preceding paragraphs, allowability of such expenses claimed by assessee under section 37 of the Act also deserves to be setaside Mismatch in 26 AS - HELD THAT:- Perusal of record it appears that differential amount reflected in form 26 A-S were not properly reconciled. As now assessee has all relevant information for the same, in the interest of natural Justice, we direct Ld. AO to tally database of revenue in light of details filed by assessee. We are therefore inclined to set aside ground no.5 to Ld.AO for reconciliation and to allow the claim as per law. Double taxation relief sought u/s 90-91 - HELD THAT:- Since the assessee was in the process of obtaining the certificates from the associated enterprises, the same could not be furnished before the Assessing Officer during the course of assessment proceedings. The A.O. in the absence of such certificates ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in law in not appreciating that the AMP expenses, etc., unilaterally incurred by the appellant in India could not be characterised as an international transaction as per section 92B, in the absence of any proved understanding/arrangement between the appellant and the associated enterprise, so as to invoke the provisions of section 92CA(3) of the Act. 3.3. That the DRP/TPO erred on facts and in law in holding that there exists an international transaction in connection with incurring of AMP expenses without placing on record any tangible material or evidence to substantiate the existence of such transaction. 3.4. That the DRP/TPO erred on facts and in law in not appreciating that the only Transfer Pricing adjustment permitted by Chapter X of the Act was in respect of the difference between the arm s length price (ALP) and the contract or declared price, but said provision could not be invoked to determine the quantum /extent of business expenditure. 3.5. That the TPO erred on facts and in law in not following the decision of the Hon ble Delhi High Court in the appellant s own case for A.Y. 2008-09 reported as 381 ITR 154 wherein the Hon ble High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at adjustment on account of allegedly excess AMP expenses is not warranted in the case of the appellant, a full risk bearing entrepreneur. 3.13. That the DRP/TPO erred on facts and in law in holding that benefit derived by the associated enterprise as a result of AMP expenses incurred by the appellant is reflected in the improvement in overall global brand ranking not appreciating that such improvement in ranking was a result of the strategic marketing efforts and expenses incurred by the associated enterprises. 3.14. That the DRP/TPO erred on facts and in law in holding that the associated enterprise is benefitting from the AMP expenses incurred by the appellant on account of royalty, sale of goods etc. Not appreciating that such transactions have been separately benchmarked and accepted to be at arm s length. 3.15. That the DRP/TPO erred on facts and in law in holding that the AE is benefitting from the AMP expenses on account of development of brand without appreciating that the associated enterprise is not selling any goods directly in the Indian market. 3.16. That the TPO erred on facts and in law in relying on the decision of the Hon bl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deductible as business expenditure. 4.2.That the assessing officer erred on facts and in law in not appreciating that the appellant has a long term right to exploit the trademark Whirlpool and benefits arising from the advertisement and marketing expenditure incurs solely to appellant. 4.3. That the assessing officer erred on facts and in law in not appreciating that the right allowed by the associated enterprise to the appellant to use the trademark Whirlpool is a privilege and not a service rendered to the associated enterprise so as to warrant compensation. 4.4. That the assessing officer erred on facts and in law in not appreciating that benefit arising to the parent company, if any, is merely incidental, not warranting disallowance of advertisement and marketing expenses incurred by the appellant. 5. That the Assessing Officer erred on facts and in law in making an addition of ₹ 37,72,806 allegedly being undisclosed income on the basis of difference in the TDS claimed by the appellant and amount of TDS reported in the individual transaction statement/AIR information. 6. That the assessing officer erred on facts and in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Thereafter, upon receipt of such intimation from Ld.TPO, Ld.AO passed final assessment order by determining the ALP of AMP expenditure at ₹ 42,59,009/-. Ld.AO after considering other disallowances computed income at ₹ 178,31,84,910/-. 3. Aggrieved by order of Ld. AO, assessee is in appeal before us now. 4. Ground No.1 is general in nature. Ground No.2 not pressed by Ld.Counsel. 5. Ground No. 3 to 3.21 have been raised against adjustment made by Ld.AO on account of alleged excessive AMP expenses amounting to ₹ 42,59,009/-. It has been submitted by Ld. Counsel that said issue now stands squarely covered in assessee s own case by order of this Tribunal in ITA Nos. 1972/Del/2015 for Assessment Year 2010-11, ITA No.1787/Del/2016 for A.Y. 2011-12 and ITA No.7085/Del/2017 for A.Y. 2012-13 vide order dated 19/01/2019. 6. We have considered rival contentions of both sides in light of records and orders passed on this issue by Coordinate Benches of this Tribunal. 6.1. From records placed before us, it is observed that, undisputedly Ld.TPO proposed adjustment on account of AMP expenses by applying bright li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Revenue, ITA No. 610 of 2014 is dismissed in the above terms, but in the circumstances with no orders as to costs. 6.3. On perusal of orders passed by Ld.TPO/AO/DRP for year under consideration, it is observed that AMP expenditure has been considered to be international transaction by applying bright line test, whereby Ld.TPO proposed an adjustment of ₹ 42,59,009/-. 6.4. Ld.Sr.DR preferred adjournment application on the ground that issue involved in present appeal is in respect of AMP adjustment. He submitted that consistent stand has been taken by revenue before this Tribunal to request for adjournment in all appeals, where AMP adjustment has been disputed by either parties on ground that Hon ble Supreme Court is ceased with the matter. 6.5. During the course of argument Ld.Sr.DR sought permission from the Bench to file written submission regarding issues raised by assessee which was granted. Accordingly, on 10/01/2019 a detailed written submission has been filed by revenue in respect of issues raised by assessee for all years under consideration which is taken on record. 6.6. Plea taken by revenue in written submission to justif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . We are therefore, inclined to set aside this issue to Ld.AO/TPO to pass fresh order considering decision of Hon ble Supreme Court. Needless to say that proper opportunity shall be granted to assessee of being heard. 7.3. Accordingly Grounds 3 to 3.21 stand allowed for statistical purposes. 8. Ground No.4 to 4.3 Ground No. 4 to 4.3 have been raised by assessee regarding disallowance of expenses under section 37 of the Act, incurred by assessee on account of alleged advertisement and marketing expenses. 8.1. Ld.Counsel submitted that this issue has been considered by Hon ble High Court assessee s own case which has been referred to herein above. He submitted that issue relates to AMP expenses which have been disallowed by Ld.AO under section 37 of the Act. Ld.Counsel submitted that Hon ble High Court has answered the question in negative that is in favour of assessee and against revenue. 8.2. Ld.Sr.DR placed reliance upon order of authorities below and submitted that this issue is interconnected with main issue of treatment of AMP expenses as international transaction, which is pending before Hon ble Supreme Court and the result is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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