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TMI Blog2023 (3) TMI 1433X X X X Extracts X X X X X X X X Extracts X X X X ..... dinate Bench in assessee's own case in assessment year 2008-09. 2.2 Having considered rival submissions, we find, the Transfer Pricing Officer (TPO) has made the adjustment to AMP expenses by treating it as international transaction coming within the definition of section 92B of the Act and has computed the adjustment applying Bright Line Test (BLT) method. It is observed, while deciding identical issue in assessee's own case for assessment year 2008-09, the Tribunal in order dated 16.11.2021 passed in ITA No. 1502/Del/2018 has held that the transaction relating to AMP expenses will not fall in the category of international transaction. However, the Tribunal restored the issue to the Assessing Officer to decide afresh abiding with the decision of the Hon'ble Supreme Court in similar pending matters. The observations of the Tribunal in this regard are as under: "6. A perusal of the order of the Hon'ble jurisdictional High Court in the case of assessee for the assessment year 2011-12 in ITA No. 795 of 2019 makes it clear that the issue is no longer res Integra. For the sake of completeness we deem it just and necessary to extract the relevant observations of the Hon& ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ansactions and BET method has no statutory basis to infer the existence of international transactions qua AMP expenses, however, the Id. DRP has proceeded to hold inter 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 Ltd. (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 qua AMP expenses requires to be established de hors the "bright line test", particularly when the taxpayer has categorically denied the existence of international transaction and 81% of its turnover is from the sale of its manufacturing in India. Moreover, without prejudice, it is the case of the ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt which is under consideration. before the Hon'ble Apex Court is modified or reversed by the Hon'ble Apex Court, then the Assessing Officer would pass the order afresh considering the decision of Hon'ble Apex Court. In those circumstances, he will also allow opportunity of being heard to the assessee. " 18. Since the aforesaid issues stand covered by the earlier decisions of this Court, no question of law arises for our consideration." 7. It is not in dispute that the case of the assessee has been that the primary engagement of the assessee is in manufacturing operations and the AMP expenditure incurred by it is to the benefit of its operations in India. In the case of the assessee, Tribunal took into consideration the submissions made by the Ld. DR that the matter relating to the international transaction involving AMP expenses is pending before the Hon'ble Apex Court and addition of the Hon'ble Apex Court would be binding upon all the authorities and therefore, while returning a finding that the assessee is a fullfledged manufacturer and the entire AMP expenses were incurred by it to enhance its sale in India and not for promoting the brand of its AE and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... argin shown by the assessee in both the assessment years under dispute were within the acceptable range of the average margin of the comparables, the transaction with the AE was claimed to be at arm's length. The TPO, however, did not accept the benchmarking of the assessee. Re-characterizing the assessee as a software development service provider, the TPO rejected the comparables selected by the assessee in the ITES segment and introduced fresh comparables from software development services segment and accordingly, proposed adjustment in both the assessment years under dispute. Based on the adjustment proposed by the TPO, the Assessing Officer made additions in the assessment orders. Though, the assessee preferred appeals challenging the adjustment, however, learned Commissioner (Appeals) upheld them. 3.2 Before us, learned counsel appearing for the assessee submitted that similar erroneous approach was adopted by the TPO in assessee's own case in assessment year 2011-12. While deciding the issue, the Tribunal rejected the approach of the TPO in selection of comparables. He submitted, the decision of the Tribunal was upheld by Hon'ble Jurisdictional High Court while dismissing th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition made on account of advance written off. 4.1 Briefly the facts are, in course of assessment proceeding, the Assessing Officer noticed that the assessee has debited certain amounts on account of advances written off. Being of the view that the deduction claimed by the assessee does not satisfy the condition of section 36(2) of the Act, the Assessing Officer disallowed the deduction. The assessee contested the disallowance before learned Commissioner (Appeals). Relying upon the decision of the Tribunal in assessee's own case in assessment years 2004-05 and 2005-06, learned Commissioner (Appeals) deleted the disallowance. 4.2 We have considered rival submissions and perused the materials on record. It is observed, identical issue came up for consideration before the Tribunal in assessment years 2004-05 and 2005-06. While deciding the issue, the Tribunal deleted the disallowance. As could be seen from the facts on record, certain trade advances in relation to the business operations could not be recovered even after long lapse of time. Therefore, the assessee has written them off in its books of account. In our view, the Assessing Officer made a fundamental error by holding that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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