TMI Blog2022 (11) TMI 981X X X X Extracts X X X X X X X X Extracts X X X X ..... Court in Maruti Suzuki (supra) set aside the order of the TPO/AO, which had determined the AMP expenditure as an international transaction, without any evidence on record and only on the basis of BLT. We are unable to agree with the contention of the learned counsel for the Revenue that in the facts of the present appeal(s), the matter should be remanded to TPO in terms of Sony Ericsson [ 2015 (3) TMI 580 - DELHI HIGH COURT] - He states that in the said decision this Court held that there exists an international transaction between the Assessee therein, who was a distributor , and its AE. We are unable to accept the said contention of the learned counsel for the Revenue that since the Assessee herein is a distributor for its AE, the corollary of this fact is that there exists an international transaction with respect to AMP expenditure, incurred by the Assessee. In the case of Sony Ericsson (Supra), the finding of this Court that the Assessee(s) therein may have an international transaction with their AE(s) for AMP expenditure was based on the terms of the agreement between the Assessee(s) and their AE(s) in the said case. The issue with respect to deletion of transfer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ational transactions under Section 92CA(3) of the Act. 2.1. The TPO in its order dated 29th January, 2013, observed that the Assessee has incurred huge Advertising, Marketing and Promotion ( AMP ) expenditure with the objective of expanding the reach of the AE s brand in India, who is the legal owner of the brand. The TPO then proceeded to apply the Bright Line Test ( BLT ) method and made an adjustment of Rs. 6,64,70,841/- on account of AMP expenditure incurred by the Assessee, and held it to be an international transaction. Pursuant to the aforesaid, the AO passed its draft assessment order under Section 144C of the Act. 2.2. 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 26 th December, 2013, disposed of the Assessee s objection and confirmed the adjustment made by the TPO on account of AMP expenditure, by relying on the decision rendered by the special bench of the ITAT in LG Electronics India Pvt. Ltd. v. ACIT, (2013) 140 ITD 41 (Del). 2.3. Pursuant, to the DRP directions, the AO passed its final assessment order dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounsel for the Revenue states that the ITAT erred in holding that the AMP expenses is not an international transaction and in doing so it ignored the nature and purpose of such expenses which are meant to create intangible asset for its AE in India. He states that the ITAT erred in holding that the AMP expenses incurred by the Assessee is not a separate international transaction. 5. He states that ITAT failed to appreciate that in the case of Sony Ericsson (Supra) this Court has held that there exists an international transaction between the assessee therein, who was a distributor , and its AE. He states that the facts of this case are similar since the Assesee herein as well is a distributor for its AE. 6. He states that the ITAT erred in not following the decision of this Court in the case of Sony Ericsson (Supra) with respect to remand to the TPO for fresh determination of the ALP. 7. He further states that since the Respondent, Assessee, is admittedly not the manufacturer of the goods and is merely a distributor for its AE, the judgements in the case of Bausch Lomb Eyecare Pvt. Ltd. vs. Additional Commissioner of Income Tax, [2016] 381 ITR 227 and Maruti Suz ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he fact that, in our considered view, the expenditure incurred by the assessee was in nature of bonafide business expenditure in furtherance of its legitimate business interests, we are of the considered view that there is no legally sustainable basis for the TPO coming to the conclusion that there was an international transaction, under section 92B, on the facts of this case. It was only on the basis of bright line test that the impugned ALP adjustment was made but that approach has already been negatived by Hon'ble Courts above. We see no reasons to remit the matter to the file of the TPO, as is prayed for by the learned Departmental Representative. A remand to the assessment stage cannot be a matter of routine; it has to be so done only when there is anything in the facts and circumstances to so warrant or justify. In any case, there are direct judicial precedents from Hon'ble jurisdictional High Court which clearly suggest that the matter regarding existence of international transaction under section 92B, as far as possible, should be decided at the level of Tribunal itself xxx xxx xxx 10. In the present case, no new facts have emerged and all the facts broug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Del), which required a TPO to examine the international transaction as he actually finds the same. In other words the very existence of an international transaction cannot be a matter for inference or surmise. 66. As already noticed, the decision in Sony Ericsson has done away with the BLT as means for determining the ALP of an international transaction involving AMP expenses. (Emphasis Supplied) 12. We are unable to agree with the contention of the learned counsel for the Revenue that in the facts of the present appeal(s), the matter should be remanded to TPO in terms of Sony Ericsson (Supra). He states that in the said decision this Court held that there exists an international transaction between the Assessee therein, who was a distributor , and its AE. We are unable to accept the said contention of the learned counsel for the Revenue that since the Assessee herein is a distributor for its AE, the corollary of this fact is that there exists an international transaction with respect to AMP expenditure, incurred by the Assessee. In the case of Sony Ericsson (Supra), the finding of this Court that the Assessee(s) therein may have an international transactio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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