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TMI Blog2019 (9) TMI 1627X X X X Extracts X X X X X X X X Extracts X X X X ..... tands disposed of in the aforesaid terms. CM APPL. 39463/2019 (application for condonation of delay of 57 days 3. By this application, the applicant seeks condonation of delay of 57 days in filing the appeal. For the reasons stated in the application, the delay is condoned. 4. The application stands disposed of in the aforesaid terms. ITA 795/2019 5. The Revenue has preferred the present appeal to assail the order dated 20.12.2018 passed by the learned Income Tax Appellate Tribunal (hereinafter referred to as 'ITAT') in ITA No. 845/Del/2016 and CO No. 95/Del/2016 in relation to the Assessment Year 2011-12. 6. The short issue that arises for consideration lies in the narrow compass. 7. In respect of Information Technology Enabled Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssue that the TPO had included in the list of comparables, Knowledge Processing Output Companies (KPO) Service Providers, whereas the Assessee was engaged in providing ITES services and the two were not comparable. 11. The ITAT in the impugned order undertook the exercise of examining the status of the 10 companies picked up for the purpose of comparison and found, as a matter of fact, that 6 of the said service providers/Companies namely Accentia Technologies Ltd, Acropetal Technologies Ltd, Eclerx Services Ltd., ICRA Techno Analytics Ltd. and TCSE Serve Ltd were not comparable, since they were not providing ITES services and were also engaged in providing KPO Services. 12. Consequently, ITAT deleted the said 6 out of 10 Companies taken ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2016) 381 ITR 117 . 17. The Tribunal while dealing with said issue held as under:- "20. Bare perusal of the order under challenge passed by the ld. TPO particularly at pages 67, 73 and 75 goes to prove that the entire adjustment qua AMP expenses has been made by the TPO on the basis of bright line method and no material whatsoever has been brought on record to show that if the taxpayer and AE have acted in concert and that they have entered into any agreement to enter into international transactions qua AMP expenses. 21. Hon'ble Delhi High Court in Sony Ericsson Indio Pvt. Ltd. v. LIT (2015) 374 ITR IIS (Del.) and subsequently in Maruti Suzuki India Ltd. v. CIT (2016) 32S ITR 210 (Del.) has categorically held that BET is not a val ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter alia that incurring of AMP expenses is an international transaction and directed to exclude the routine selling and distribution expenses and directed the TPO to use the cost plus method and further directed to apply the markup on excess AMP expenses as per sub-clause (ii) of Rule 108( I )(c). 25. However, we are of the considered view that following the decision rendered by Hon'ble Delhi High Court in Maruti Suzuki India l.td. v. C1T (supra), the first step for the Revenue to benchmark the AMP expenses is to establish the existence of international transaction; if it is proved, then to proceed for benchmarking the transactions qua AMP expenses. Now, it is the settled principle of law that existence of international transaction qu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d before the Hon'ble Apex Court, the matter may be kept pending till the decision by Hon'ble Apex Court. However, we are of the considered view that since it is a stay granted matter and the proceedings before the second appellate authority have not been stayed by any higher forum, the same cannot be kept pending. 28. After considering the legal position as discussed in the preceding paragraphs, we are of the considered opinion that the AI.P of an international transaction involving AMP expenses, the adjustment made by the TPO/DRP/AO is not sustainable in the eyes of law. At the same time, we cannot ignore the submission made by the learned DR that the matter is pending before Hon'ble Apex Court and the decision of Hon'ble ..... X X X X Extracts X X X X X X X X Extracts X X X X
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