2016 (2) TMI 1103 - HC - Income Tax

Following substantial question of law arises for determination Whether in light of the decision of Maruti Suzuki Ltd. v. CIT (2015 (12) TMI 634 - DELHI HIGH COURT) the ITAT was justified in holding that there was an international transaction between the Assessee and its Associated Enterprise with regard to advertising marketing and publicity (AMP) expenses and in remanding the matter to the Assessing Officer/Transfer Pricing Officer for determining the arms length price of such transaction for the purposes of transfer pricing adjustment?

Summary

Issues: Condonation of delay in filing the appeal, substantial question of law regarding international transaction for transfer pricing adjustment.

The judgment pertains to two applications for condonation of delay in filing and re-filing the appeal, which were both condoned by the court. The court then admitted the appeal and identified the substantial question of law for determination. The question revolved around whether the ITAT was justified in finding an international transaction between the Assessee and its Associated Enterprise regarding AMP expenses. The court allowed the parties to submit additional documents within eight weeks and scheduled the hearing for a specific date.

The first issue addressed in the judgment is the condonation of delay in filing the appeal. The court, after considering the reasons stated in the application, condoned the delay of 68 days in filing the appeal. Similarly, the delay in re-filing the appeal was also condoned by the court based on the reasons presented in the application. Both applications for condonation of delay were disposed of by the court.

The second issue involves the substantial question of law regarding an international transaction for transfer pricing adjustment. The court highlighted the question of whether the ITAT was justified in determining the existence of an international transaction related to AMP expenses between the Assessee and its Associated Enterprise. The court referred to the decision in Maruti Suzuki Ltd. v. CIT (2016) 381 ITR 117 (Del) and raised concerns about the ITAT's decision in remanding the matter to the Assessing Officer/Transfer Pricing Officer for determining the arms length price of the transaction. The court allowed the parties to submit additional documents within a specified timeframe and scheduled the hearing for further deliberation on the issue.