Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2019 (5) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (5) TMI 1424 - ITAT DELHIPenalty u/s 271(1)(c) - addition pertaining to advertisement, marketing and promotion expenses which was a transfer pricing adjustment - HELD THAT:- Hon’ble Delhi High Court in assessee’s own case for assessment year 2010-11 [2018 (9) TMI 1761 - DELHI HIGH COURT] has dismissed the department’s appeal and has held that there were no good grounds and reasons to treat advertisement and sales expenses as a separate and independent international transaction in the case of the assessee. The Hon’ble High Court held that the revenue had erred in not treating this activity as a function performed by the assessee who was engaged in marketing and distribution. Undisputedly, the assessee is engaged in marketing and distribution of Mary Kay products in India and the observation of the Hon’ble Delhi High Court in assessment year 2010-11 in assessee’s own case would apply mutatis mutandis in this year also. Once it is held that AMP expenditure is not an international transaction, the transfer pricing adjustment would have no feet to stand. Even though in the year under consideration, the assessee has accepted the addition in this regard in the quantum proceedings, the fact remains that such addition was not sustainable in view of the observation of the Hon’ble Delhi High Court in assessee’s own case that the AMP expenditure was not to be considered as a separate international transaction. Respectfully following the judgment of the Hon’ble Delhi High Court in the assessee’s own case for assessment year 2010-11 on identical facts, we hold that the AMP expenditure could not have been treated as a separate international transaction and, therefore, the penalty imposed on such transfer pricing adjustment is not sustainable. - Decided in favour of assessee
|