TMI Blog2020 (5) TMI 484X X X X Extracts X X X X X X X X Extracts X X X X ..... 2004-05 and 2005- 06 and the decision of the Hon ble Delhi High Court in the case of Seagram Manufacturing (P) Ltd. (Now merged with the assesseee) [ 2015 (10) TMI 491 - DELHI HIGH COURT] . We do not find any infirmity in the order of the CIT(A) on this issue. We find identical issue had come up before the Tribunal in assessee s own case for A.Y. 2007-08. - ITA Nos.1365, 1379/Del/2018 And 2366/Del/2019 - - - Dated:- 15-5-2020 - Shri R.K. Panda, Accountant Member And Ms Suchitra Kamble, Judicial Member For the Assessee : Shri Deepak Chopra, Advocate For the Revenue : H.K. Choudhary, CIT, DR ORDER PER R.K. PANDA, AM: ITA No.1365/Del/2018 and ITA No.1607/Del/2018 are cross appeals and are directed against the order dated 28th December, 2017 of the CIT(A)-42, New Delhi, relating to A.Y. 2012-13. ITA No.1379/Del/2018 and ITA No.1608/Del/2018 are cross appeals and are directed against the order dated 29th December, 2017 of the CIT(A)-31, New Delhi for A.Y. 2013-14. ITA No.2366/Del/2019 and 2601/Del/2019 are cross appeals and are directed against the order dated 20th December, 2018 of the CIT(A)-44, New Delhi, relating to A.Y. 2014-15. Since common issues are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncurred primarily for building different brands. He noted that the AMP expenditure incurred by the assessee in relation to two segments is substantial in relation to the sales in the two segments. It was submitted by the assessee that it did not own any of the brands which were being sold by it in India except Master Blend and Nine Hills. He observed that brands under which the assessee manufactures IMFL and distributes BIO are all owned by the AEs of the assessee. Further, the advertisement campaign of the assessee shows that the assesseee was promoting the brands in its advertisement and not the actual products. He, therefore, was of the opinion that the AMP expenditure of the assessee had a direct bearing on the promotion of brands of its AEs. He, therefore, issued a show cause notice asking the assessee to explain as to why the AMP expenditure in the distribution segment should not be treated as an international transaction. Rejecting various explanations given by the assesssee and relying on various decisions, the TPO proposed an upward adjustment of ₹ 5,03,33,013/- in the distribution segment, the details of which are as under:- 5. Now, for rendering the marketing s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3,00,000//-, the details of which are as under:- The assessee s contentions have been duly considered. It is noted that as per the assessee s own submissions, Royal Stag, Imperial Blue, Something Special, Nine Hills Wine and Master Blend are sold exclusively in India. Blenders Pride, 100 Pipers, Fuel Vodka, Havana, Oaken Glow and Passport have sales outside India as per the assessee s submissions. The contention of the assessee in relation to the AMP expenses that pertain to the brands whose sales happen exclusively in India is reasonable and is being permitted. However, there is no doubt that the benefit of enhanced brand value inures to the sole benefit of the legal owner i.e. the parent AE. Therefore, it is the considered view of this office that in the event of alienation of these brands by the legal owner, the assessee must be commensurately compensated for the function performed by it leading to the creation of valuable marketing intangibles in relation to these brands. There are other brands legally owned by the parent AE including Blenders Pride whose sales also happen outside India. In case of such brands, it is the view of the undersigned that it is not possible ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he AO, in the final assessment order also made addition of ₹ 6,32,58,960/- on account of provision for transit breakage, ₹ 50,38,72,290/- on account of brand expenses and ₹ 63,24,54,323/- u/s 40a(ia) for non-deduction of tax from reimbursement of trade scheme to promoters. Thus, the AO determined the total income of the assessee at ₹ 1039,96,37,846/-. 7. In appeal, the ld.CIT(A) held that the AMP expenditure is not an international transaction in the absence of sufficient evidence towards understanding, arrangement or action in concert in the case of manufacturing segment. He was of the opinion that the high scale of AMP expenditure year on year basis per se cannot be the yardstick to hold it as international transaction. According to him it can be the starting point to investigate, but, it cannot be taken as the evidence in itself. While holding so, he also noted that the ITAT in assessee s own case for A.Y. 2005-06 has held that no adjustment was warranted on account of AMP expenditure. He accordingly deleted the AMP expenditure added by the AO/TPO in the manufacturing segment amounting to ₹ 57,83,00,000/-. 8. So far as the upward adjustme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved on the assessee on the same date. The TPO, further, submitted the details in this regard vide letter dated 27.12.2017. Further, the appellant also submitted details of AMP intensity adjustment vide email dated 22/12/2017. The AMP adjustment as worked out by the AO is as under:- Adjustment for Distribution Segment (Amount (in Rs.) Operating revenue of the Taxpayer 1,20,28,82,740 Operating cost of the Taxpayer 1,14,47,65,561 Operating Profit 5,81,17,179 Arm's Length OP/ OR 4.83% Arm s Length profit 5,80,99,236 Diff. between the ALP and reported margin -17,943 international transaction 342570563 Proportionate Adjustment (5,369) 5% of international transatransactions 1,71,28,528 1 * the above calculation does not include M/s. Delhi Duty Free Services Pvt. Ltd. because of nonavailability of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iled to appreciate that when the Manufacturing Segment of the Appellant had already been benchmarked using Transactional Net Margin Method ( TNMM ) and the operating margins of the Appellant were found be at arms length with that of the comparable companies, there was no requirement to separately apply AMP intensity adjustment, in order to factor in the difference between the AMP functions performed by the Appellant and the comparable companies. 2.3 That the Ld. CIT(A), in the garb of AMP Intensity Adjustment, have compared the AMP functions of tested party, i.e., Appellant and comparable entities by using Brightline, i.e., AMP / Sales. 2.4. That the Ld. CIT(A) has erred in including the selling and distribution expenses while computing the AMP spend of the Appellant in complete disregard of the ratio laid down by the Hon ble jurisdictional High Court in the case of Sony Ericsson Mobile Communications India Pvt. Ltd. : vs. CIT (supra). Distribution Segment 3. That the Ld. TPO / CIT(A) has erred in observing / concluding that incurrence of AMP expenses in connection with the Distribution Segment constitutes a separate International Transaction under Section 92B o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the Sales Promoters merely facilitating the disbursal of such incentives. 4.3. That the Ld. AO / CIT(A) has failed to appreciate that the reimbursement of trade scheme to promoters was in the nature of incentives and discounts to retailers and did not contain any element of commission and hence was not subject to TDS under section 194H of the Act. 4.4. That the Ld. AO/ CIT(A) has disregarded that the impugned amount was purely in the nature of cost-to-cost reimbursement and does not contain any element of commission/income and hence is not subject to TDS under section 194H of the Act. 4.5. That the Ld. AO/CIT(A) failed to appreciate that these trade schemes / incentives are given to Retailers to promote/boost sales of its products as the State Trading Corporations levies demurrage charges on the unmoving inventory lying with it. 4.6. That the Ld. AO/CIT(A) failed to appreciate that section 194H can be invoked only in cases where payment has been made/received in lieu of services rendered and in the facts of the present case, no services are being rendered by the Retailer to the Appellant. 4.7. That the Ld. AO/ CIT(A) failed to appreciate that the said expenditure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ossly erred in applying a distorted version of bright line test ( BLT ) under the guise of AMP instensity approach to benchmark the international transaction of import of raw material which was not even disputed by the Ld. TPO in the first instance. Ground 2.6: That without prejudice to other grounds, the Ld. CIT(A) grossly erred in allowing the inclusion of M/s. Som Distilleries Limtied based on Ld. TPO s order in Appellant s own case for subsequent year, without appreciation that the said comparable would fail the functions, assets and risks ( FAR ) test as prescribed under Rule 10B(2) of the Income-tax Rules, 1962 ( Rules ) when compared with the Appellant, vis- -vis manufacturing segment of the Appellant. Ground 2.7: That without prejudice to other grounds, the Ld. CIT(A) grossly erred in not allowing the inclusion of M/s. Jagatjit Industries Ltd. based on Ld. TPO s order in Appellant's own case for subsequent year, without appreciation that the said comparable had similar FAR as prescribed under Rule 10B(2) of the Rules when compared with the Appellant, vis-a-vis manufacturing segment of the Appellant. Ground 2.8: That without prejudice to other grounds, the Ld. C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... factor in the difference between the AMP functions performed by the Appellant and the comparable companies. 2.3 That the Ld. CIT(A), in the garb of AMP Intensity Adjustment, have compared the AMP functions of tested party, i.e., Appellant and comparable entities by using Brightline, i.e., AMP / Sales. 2.4 That the Td. CIT(A) erred in including the selling and distribution expenses while computing the AMP spend of the Appellant in complete disregard of the ratio laid down by the hon ble jurisdictional High Court in the case of Sony Ericsson Mobile Communications India Pvt. Ltd. : vs. CIT (supra). 2.5. That the Ld. CIT(A) erred in rejecting functionally similar comparable companies that were selected by the Appellant in its Transfer Pricing Documentation on ad-hoc and unsubstantiated basis. 2.6. That the Ld. CIT(A) has wrongly appreciated the functional profile of Khoday India Limited ( KIL ) as the CIT(A) has incorrectly concluded that KIL is engaged in manufacture of country liqour. 2.7. That Ld. CIT(A) erred in concluding that segmental details of KILIMFL segment were not available and hence, it could not be regarded as a suitable comparable, in complete disregard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bution Segment 3. That the Ld. TPO / C1T(A) has erred in observing / concluding that incurrence of AMP expenses in connection with the Distribution Segment constitutes a separate International Transaction under Section 92B of the Act and requires separate benchmarking. 3.1. That once the margins earned by the Appellant from its Distribution Segment were found to be at arm s length vis-a-vis the comparable companies, there arose no occasion for the CIT(A) to carry out any separate AMP intensity adjustment, in view of the ratio laid down by the jurisdictional High Court in the recent judgments. 3.2 That the Ld. CIT(A) erred in observing, that payment of Business Performance Guarantee ( BPG ) by AE to the Appellant, for performing distribution and marketing functions, goes to show that, there was an arrangement between the Appellant and its AE w.r.t. AMP. 3.3. That the Ld. CIT(A) failed to appreciate that the BPG was received by the Appellant for performing the distribution activity, of which AMP was only one of the functions, and hence, it could not be equated with direct subsidy received by an assessee in lieu of the AMP expenses incurred by it. 3.4. That the L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t contain any element of commission and hence was not subject to TDS under section 194H of the Act. 4.4. That the Ld. AO/ CIT(A) has disregarded that the impugned amount was purely in the nature of cost-to-cost reimbursement and does not contain any element of commission/income and hence is not subject to TDS under section 194H of the Act. 4.5. That the Ld. AO/CIT(A) failed to .4,3appreciate that these trade schemes / incentives are given to Retailers to promote/boost sales of its products as the State Trading Corporations levies demurrage charges on the unmoving inventory lying with it. 4.6. That the Ld. AO/C1T(A) failed to appreciate that section 194H can be invoked only in cases where payment has been made/received in lieu of services rendered and in the facts of the present case, no services are being rendered by the Retailer to the Appellant. 4.7. That the Ld. AO/ C1T(A) failed to appreciate that the said expenditure was held to be a pure reimbursement not subject to TDS by the Ld. CIT(A) in the orders passed in the case of Appellant s sister concern, Seagram Distilleries Pvt Ltd for the Assessment Years 2005-06 to 2009-10. Re: Consequential Grounds 5. That ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rossly erred in allowing the inclusion of M/s. Som Distilleries Limtied, without appreciation that the said comparable failed the functions, assets and risks ( FAR ) test as prescribed under Rule 10B(2) of the Income-tax Rules, 1962 ( Rules ) when compared with the Appellant, vis-a-vis manufacturing segment of the Appellant. Ground 3.10: That the Ld. CIT(A) grossly erred in applying a distorted version of BLT under the guise of AMP instensity approach to benchmark the international transaction of purchase of finished goods which was not even disputed by the Ld. TPO in the first instance. Assessee s grounds of appeal (2014-15) 1. That on the facts and in the circumstances of the case and in law, the order passed by the Commissioner of Income-tax (Appeals) [ CIT(A) ] under Section 250 of the Income-tax Act, 1961 ( the Act ), to the extent prejudicial to the Appellant, is bad in law and void ab-initio. Transfer Pricing addition made on account of Advertisement, Marketing and Promotional ( AMP ) expenses Distribution Segment 2. That the Ld. TPO / CIT(A) has erred in observing / concluding that incurrence of AMP expenses in connection with the Distribution S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d basis. 11. That the CIT(A) erred in setting aside, issue of exclusion of M/s Delhi Duty Free Services Pvt. Ltd. ( DDFS ), by directing the AO to verify whether related party transactions undertaken by DDFS were in excess of 25%, even when all material facts were on record. Re: Disallowance of disbursement of Trade Scheme to Retailers via sales promoters on account of non-deduction of tax at source under section 40(a) (ia) of the Act. 12. That the Ld. AO/ Ld. CIT(A) erred on facts and in law in disallowing payment of trade schemes to retailers via sales promoters amounting to INR 1,68,93,84,224/-, on account of non-deduction of tax at source under section 40(a)(ia) of the Act. 13. That the Ld. CIT(A) erred in rejecting the additional evidence filed by the Appellant on the ground that sufficient opportunity was granted to the Appellant during the course of assessment proceedings to show-cause as to why the trade schemes paid to retailers via sales promoters should not be disallowed, however, the Appellant did not produce any documents which were now sought be filed as additional evidence. 14. That the Ld. CIT(A) rejected the additional evidence in complete ignoranc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... promoters and disbursement of trade schemes to retailers through sales promoter had been separately charged by the Appellant in its books of accounts and TDS was duly deducted and deposited on the amounts of commission paid. 23. That the disbursement of trade scheme could not have been classified as commission, which was subject to witholding under section 194H of the Act, as the payments were meant for retailers, who were separate and independent entities and were neither, in any way, acting as agents of the Appellant nor were they providing any service to the Appellant. 24. That the Ld. AO/ Ld. CIT(A) failed to appreciate that existence of a principal - agent relationship is a mandatory pre-requisite for treating the payments as Commission and witholding tax under section 194H of the Act. 25. That the Ld. AO/ Ld. CIT(A) completely overlooked the fact that the trade schemes were meant solely for the retailers and the sales promoters were merely acting as conduits / pass through entity. 26. That the Ld. AO/ Ld. CIT(A) failed to appreciate that the reimbursement of trade scheme to promoters was in the nature of discounts and did not contain any element of commission a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat assessee enjoys an enduring benefit on account of advertisement expenses incurred by treating it as revenue expenditure. 5. That the grounds of appeal are without prejudice to each other. 6. That the appellant craves leave to add, amend, alter or forgo any grounds(s) of appeal either before or at the time hearing of the appeal. 13. After hearing both the sides and considering the fact that these additional grounds are purely legal in nature and no fresh facts are required to be looked into, therefore, following the decision of the Hon ble Supreme Court in the case of NTPC Ltd., reported in 229 ITR 383 , the additional grounds raised by the assessee are allowed for adjudication. 14. Ground of appeal No.1 and 2 by the Revenue relate to the order of the CIT(A) in deleting the transfer pricing adjustment made by the TPO on account of advertisement, marketing and the promotional expenditure. 15. We have considered the rival arguments made by both the sides, perused the orders of the authorities below and the paper book filed on behalf of the assesseee. We have also considered the various decisions cited by both the sides. We find the TPO in the instant case has he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llant company has been obliged to incur such AMP of a certain level for its parent for the purpose of promoting the brand. The element of obligation is missing in the findings. There is no directive from the parent to spend a particular level of AMP expenditure. The common strategy at group level also cannot be considered as sufficient test to hold it as action in concert and therefore as an international transaction. Common strategy at Group level is for bringing synergy, Merely because the expense resulted in service or benefit to the other party would by itself not constitute the transaction as international transaction This view has been fortified by the decision of Hon'ble Delhi High Court in the case of Maruti Suzuki India Pvt. Ltd. v. CIT: [2016] 3811TR 117(Delhi) which reads as under: Even if the word 'transaction' is given its widest connotation, and need not involve any transfer of money or a written agreement as suggested by the Revenue, and even if resort is had to Section 92F(v)which defines 'transaction' to include 'arrangement', 'understanding' or action in concert', 'whether forma! or in writing', it is still i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allocation of 50% of such AMP expenditure to foreign AE (brand legal owner) without any basis is not justified. 16. He, however, taking a cue from the TPO s order for A.Y. 2013-14, applied a distorted version of brightline test while using AMP as a function to benchmark the international transaction of import of raw material. Even the said method, in our opinion, was applied without having any backing of any provision of law. Nevertheless, the CIT(A) allowed relief to the assessee in terms of +/- 5% range and held that the transaction of import of raw material was at arm s length. 16.1 So far as the distribution segment is concerned, we find the TPO, for the year under consideration, held that because the ssesseee was incurring substantial expenditure, therefore, such expenditure was to be treated as an international transaction. Thereafter, the TPO, applying the methodology as given earlier in the preceding paragraph, suggested an upward adjustment of ₹ 5,03,33,013/- after using comparables engaged in marketing support functions. 17. We find, the ld.CIT(A) upheld the order of the TPO to the extent of existence of international transaction, after placing reliance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion has been made in assessee s own case here and, therefore, the reliance of CIT(A) on that account is completely unwarranted. 19. So far as the order of the CIT(A) in case of manufacturing segment is concerned, it is the submission of the ld. Counsel that the Hon ble Delhi High Court in the case of Maruti Suzuki (supra), Whirlpool India Pvt. Ltd. vs. CIT, 381 ITR 154, Bausch Lamb Eyecare (India) Pvt. Ltd. vs. ACIT, 381 ITR 227, Volvoline Cummins Pvt. Ltd. (supra) and Honda Siel Power Products Ltd. vs. DCIT, 283 CTR 322, has held that the expenditure on account of AMP expenditure is not an international transaction. He also relied on the decision of the Tribunal in the case of Pepsico India Holdings Pvt. Ltd. vs. ACIT reported in 100 taxmann.com 159 to the above proposition. 20. The ld. DR on the other hand heavily relied on the order of the AO/TPO and relied on the decision of the Tribunal in the case of Toshiba India (P) Ltd. vs. DCIT, vide ITA No.1357/Del/2017, order dated 01.09.2017 for A.Y. 2012-13 and the decision of Hon ble Delhi High Court in the case of Sony Ericsson Mobile Communications India (P) Ltd., vide ITA No.16/2014, order dated 16.03.2015. 21. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there exists an international transaction of brand promotion services between the assessee and the AE. 12. In our considered opinion, while dealing with the issue of bench marking of AMP expenses, the Revenue needs to establish the existence of international transaction before undertaking bench marking of AMP expenses and such transaction cannot be inferred merely on the basis of BLT. For this proposition, we draw support from the judgment of the Hon'ble Delhi High Court in the case of Maruti Suzuki India Ltd 381 ITR 117. 13. In this case, the Hon'ble High Court held that existence of an international transaction needs to be established de hors the Bright Line Test. The relevant finding of the Hon'ble High Court reads as under: 43. Secondly, the cases which were disposed of by the judgment, i.e. of the three Assessees Canon, Reebok and Sony Ericsson were all of distributors of products manufactured by foreign AEs. The said Assessees were themselves not manufacturers. In any event, none of them appeared to have questioned the existence of an international transaction involving the concerned foreign AE. It was also not disputed that the said international transa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rposes of the 'means' part of clause (b) and the 'includes' part of clause (c), the Revenue has to show that there exists an 'agreement' or 'arrangement' or 'understanding' between MSIL and SMC whereby MSIL is obliged to spend excessively on AMP in order to promote the brand of SMC. As far as the legislative intent is concerned, it is seen that certain transactions listed in the Explanation under clauses (i) (a) to (e) to Section 92B are described as 'international transaction'. This might be only an illustrative list, but significantly it does not list AMP spending as one such transaction. 61. The submission of the Revenue in this regard is: The mere fact that the service or benefit has been provided by one party to the other would by itself constitute a transaction irrespective of whether the consideration for the same has been paid or remains payable or there is a mutual agreement to not charge any compensation for the service or benefit. Even if the word 'transaction' is given its widest connotation, and need not involve any transfer of money or a written agreement as suggested by the Revenue, and even if resort is ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in Section 92C. The fourth step would be to compare the price of the transaction that is shown to exist with that of the ALP and make the TP adjustment by substituting the ALP for the contract price. XXX 34. The TP adjustment is not expected to be made by deducing from the difference between the 'excessive' AMP expenditure incurred by the Assessee and the AMP expenditure of a comparable entity that an international transaction exists and then proceed to make the adjustment of the difference in order to determine the value of such AMP expenditure incurred for the AE. 35. It is for the above reason that the BLT has been rejected as a valid method for either determining the existence of international transaction or for the determination of ALP of such transaction. Although, under Section 92B read with Section 92F (v), an international transaction could include an arrangement, understanding or action in concert, this cannot be a matter of inference. There has to be some tangible evidence on record to show that two parties have acted in concert . XXX 37. The provisions under Chapter X do envisage a 'separate entity concept'. In other words, there cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ic Pvt Ltd (ITA No.1010/2018), too, dismissed the Revenue's appeal, following the law laid down in its earlier decision (supra) and held as under: We have examined the assessment order and do not find any good ground and reason given therein to treat advertisement and sales promotion expenses as a separate and independent international transaction and not to regard and treat the said activity as a function performed by the respondent-assessee, who was engaged in marketing and distribution. Further, while segregating / debundling and treating advertisement and sales promotion as an independent and separate international transaction, the assessing officer did not apportion the operating profit/ income as declared and accepted in respect of the international transactions. 21. In our understanding of the facts and law, mere agreement or arrangement for allowing use of their brand name by the AE on products does not lead to an inference that there is an action in concert or the parties were acting together to incur higher expenditure on AMP in order to render a service of brand building. Such inference would be in the realm of assumption/surmise. In our considered opinion, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14 has held that if the Indian entity has satisfied Transactional Net Margin Method (TNMM), i.e., as long as the operating margins of the Indian enterprise are higher than the operating margins of comparable companies, no further separate compensation for AMP expenses is warranted. The Hon'ble Court held as under: 101. However, once the Assessing Officer/TPO accepts and adopts TNM Method, but then chooses to treat a particular expenditure like AMP as a separate international transaction without bifurcation/segregation, it would as noticed above, lead to unusual and incongruous results as AMP expenses is the cost or expense and is not diverse. It is factored in the net profit of the inter-linked transaction. This would be also in consonance with Rule 10B(1)(e), which mandates only arriving at the net profit margin by comparing the profits and loss account of the tested party with the comparable. The TNM Method proceeds on the assumption that functions, assets and risk being broadly similar and once suitable adjustments have been made, all things get taken into account and stand reconciled when computing the net profit margin. Once the comparables pass the functional analy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and expenses. 25. After hearing both the sides, we find the AO made an addition of ₹ 58,38,72,290/- being 20% of the brand expenses debited by the assessee in the books of account at ₹ 3144,29,462/- While doing so, he followed the order of his predecessor for the preceding assessment years. We find, the ld.CIT(A) deleted the addition by following the order of his predecessor for A.Y.s 2004-05 and 2005- 06 and the decision of the Hon ble Delhi High Court in the case of Seagram Manufacturing (P) Ltd. (Now merged with the assesseee). We do not find any infirmity in the order of the CIT(A) on this issue. We find identical issue had come up before the Tribunal in assessee s own case for A.Y. 2007-08. We find, the Tribunal, vide ITA No.910/Del/2015, order dated 15th March, 2019, has decided the issue and deleted the addition by observing as under:- 28. We have heard the rival submissions and have given thoughtful consideration to the orders of the authorities below. We find force in the ITA Nos. 910 to 914/Del./2015 contention of the ld. counsel for the assessee. The Hon'ble High Court in ITA No. 885/2016 was, inter alia, seized with the following substantial quest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8.2 During the course of proceedings, the Ld. AR. pointed out that the issue was squarely covered in favour of the assessee vide this Tribunal's order dated 14.03.2016 passed in Assesse's own case for the immediately preceding years, i.e., AY 2002-03 and 2003-04. It was further pointed out that the aforesaid issue had also been decided in favour of the assessee by Hon'ble High Court of Delhi vide order dated 6.04.2016 passed in ITA No. 224/2016 and 225/2016 in the case of assessee's sister concern, viz., M/s Seagram Distilleries Pvt Ltd.. The Ld. AR also cited Hindustan Aluminium Corporation Limited v. CIT: 159 ITR 673, CIT v. Berger Paints (India) Ltd. (254 ITR 503), CIT v. Salora International (308 ITR 199) (Del.), CIT v. Casio India Ltd. (335 ITR 196) (Del) and CIT v. Adidas India Marketing Ltd. (195 Taxman 256) (Del.) to support his contentions. 8.3 The Ld. CIT (DR) supported the order of the Ld. TPO/AO. 8.4 We have heard the rival contentions and perused the orders of the jurisdictional High Court and that of the co-ordinate benches. We find force in the arguments of the Ld. Counsel that the issue is squarely covered in favour of the assessee as there is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l No.4 to 4.7 by the assessee relate to the disallowance of ₹ 63,24,54,323/- u/s 40(a)ia) on account of non-deduction of tax from reimbursement of trade schemes to the promoters u/s 194H. 33. We have heard the rival arguments made by both the sides and perused the material available on record. We find the AO made addition of ₹ 63,24,54,323/- on the ground that the assessee has not deducted tax from payments on account of reimbursement of trade schemes to sales promoters as per the provisions of section 194H. Therefore, following the provisions of section 40(a)(ia), the AO made disallowance of ₹ 63,24,54,323/- which has been upheld by the CIT(A). We find, identical issue had come up before the Tribunal in assessee s own case for A.Y. 2007-08. We find, the Tribunal, vide ITA No.910/Del/2015, order dated 15th March, 2019, has discussed the issue and restored the issue to the file of the AO with certain directions by observing as under:- 44. Before us, the ld. counsel for the assessee stated that in assessee's sister concern Seagram Distilleries [supra] for assessment year 2005-06 to 2009-10, the first appellate authority has allowed the ground on principle ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
