TMI Blog2022 (11) TMI 626X X X X Extracts X X X X X X X X Extracts X X X X ..... Assesee was in the nature of bonafide business expenditure in furtherance of its legitimate business interests. Revenue has not assailed the said findings of ITAT in the appeals filed for the said assessment years. It is therefore, evident that Revenue s contention that the AMP expenditure should be treated as capital expenditure is without any legal basis. - ITA 408/2022 - - - Dated:- 2-11-2022 - HON'BLE MR. JUSTICE MANMOHAN AND HON'BLE MS. JUSTICE MANMEET PRITAM SINGH ARORA Appellant Through: Mr. Ruchir Bhatia, Senior Standing Counsel for Revenue. Respondent Through: Mr. Sumit Mangal, Mr. Mayank Aggarwal Ms. Radhika Sharma, Advocates. J U D G M E N T MANMEET PRITAM SINGH ARORA, J (ORAL): ITA 408/202 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enditure incurred by the Assessee. Pursuant to the aforesaid, the AO passed its draft assessment order under Section 144C of the Act. 4. Being aggrieved by the aforesaid adjustment made by the TPO on account of AMP expenditure, the Assessee filed its objection before the Dispute Resolution Panel ( DRP ). The DRP vide its order dated 16 th November, 2015, allowed the Assessee s objection, by deleting the ALP adjustment made by the TPO by applying BLT method in light of the judgment of this Court in Sony Ericsson Mobile Communications India (P.) Ltd. v. Commissioner of Income Tax III, (2015) 374 ITR 118 (Del). 5. The DRP held that comparables of similar functional intensity are to be taken into consideration for determining the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duce or enhance the variation proposed in the draft order. However, DRP is not empowered to set aside any proposed variation or issue any direction under Section 144C(5) for further enquiry for passing the assessment order and therefore, the disallowance proposed under Section 37 (1) of the Act was without jurisdiction. 6.2. The ITAT agreed with the contention of the Assessee that the direction of the DRP to AO for determining the disallowance of AMP expenditure under Section 37(1) of the Act after hearing the Assessee was in the nature of a remand. It held that such a direction by DRP is impermissible under Section 144C of the Act and held that AO is not empowered to make a fresh determination under Section 144C. 6.3. The ITAT also h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the Revenue states that the ITAT fell in error in holding that the AMP expenditure incurred by the Assessee is revenue in nature. He states that the said expenditure is capital in nature. He states that the ITAT erred in holding that the BLT was not a proper method for bench marking the AMP expenditure ignoring the fact that the Revenue has not accepted the decision in the case of Sony Ericsson (supra) and has filed an SLP against the same. 8. We are unable to accept the contention of the Revenue. The deletion of the transfer pricing adjustment on account of the AMP expenditure proposed by applying BLT method is impermissible as the said method has been expressly negatived by the Court in Sony Ericsson (supra) for determining the ALP ..... X X X X Extracts X X X X X X X X Extracts X X X X
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