2015 (9) TMI 1433 - HC - Income Tax

Validity of transfer pricing adjustment order in respect of the expenditure incurred by the Assessee on advertisement marketing and publicity expenses - Held that - Since the issue in the present appeal concerning AY 2009-2010 is similar to the one arising in AY 2008-09 the Court finds no reason why the matter as far as AY 2009-2010 should also not be remanded to the TPO/AO for a fresh determination in accordance with the decision in Sony Ericsson Mobile Communications India P. Ltd. (2015 (3) TMI 580 - DELHI HIGH COURT ).

Summary

Issues:
Validity of transfer pricing adjustment order on advertisement, marketing, and publicity expenses for Assessment Year 2009-10.

Analysis:
The High Court dealt with two appeals, one by the Assessee and one by the Revenue, both challenging the order of the Income Tax Appellate Tribunal (ITAT) for Assessment Year 2009-10. The issue in the Assessee's appeal revolved around the validity of the transfer pricing adjustment order made by the Assessing Officer (AO)/Transfer Pricing Officer (TPO) regarding the expenditure on advertisement, marketing, and publicity expenses. The ITAT had set aside the AO/TPO's order and remitted the matter for a fresh decision in line with a judgment by the Special Bench of the ITAT. The Revenue was aggrieved by the remand order by the ITAT, leading to their appeal.

For the Assessment Year 2008-09, a similar issue had been raised in a previous appeal, which was decided by the High Court along with other appeals. The Court had provided detailed directions and remanded the matter to the ITAT for a fresh decision according to the law. Subsequently, the ITAT, following the High Court's directions, remanded the issue back to the TPO/AO for a fresh determination. Given the similarity of the issue in the present appeal for Assessment Year 2009-10 to the one in the previous year, the High Court found it appropriate to remand the matter to the TPO/AO for a fresh determination in line with the previous decision.

Consequently, the High Court set aside the ITAT's order dated 30th May 2014 and remanded the matter to the AO/TPO for a fresh determination in accordance with the High Court's previous decision. The Court clarified that both the Assessee's and the Revenue's grounds in the appeals should be duly considered by the TPO/AO in accordance with the law. As a result, the appeals were disposed of with the above directions.