2024 (12) TMI 418 - AT - Income Tax

TP Adjustment - MAM selection - Admission of additional documents - TPO rejecting Resale Price Method RPM as Most Appropriate Method MAM and application of Berry Ratio at the profit level indicator - HELD THAT - On perusal of the additional evidences, we find that the assessee filed Appendix 1 to 6 consisting of determination of dealer prices across various regions, letter of intent, etc. DR reported no objection in remanding the matter to the file of TPO for fresh consideration in view of the finding of the ITAT in AY 2011-12. Therefore, we deem it proper to remand the matter to the file of the AO/TPO with a direction to admit the above said additional evidences and determine the most appropriate method for adopting the ALP in the facts and circumstances of the case. Thus, ground Nos. 3 4 raised by the assessee are allowed for statistical purposes. Disallowance of business promotion expenditure - assessee debited an amount under the head other expenses relating to business promotion expenses - HELD THAT - Considering the submissions of both the parties and taking into account the undertaking given by the ld. AR that the assessee is ready to file evidences before the Assessing Officer, in the interest of justice, we deem it proper to remit the matter back to the file of the Assessing Officer for fresh adjudication.

Summary

Issues:
1. Rejection of Resale Price Method and adoption of Berry Ratio as the Most Appropriate Method.
2. Admissibility of additional evidences for fresh consideration.
3. Disallowance of business promotion expenditure.

Analysis:

Issue 1: Rejection of Resale Price Method and adoption of Berry Ratio
The appeals were directed against final assessment orders passed under the Income Tax Act for the assessment years 2014-15 and 2013-14. The Appellate Tribunal decided to hear both appeals together due to similar issues. The assessee challenged the rejection of Resale Price Method (RPM) and the adoption of Berry Ratio as the Most Appropriate Method (MAM) by the Assessing Officer (AO)/DRP/TPO. The Tribunal considered the additional evidences filed by the assessee, which were not presented before the TPO/DRP. Referring to a previous order in the assessee's own case, the Tribunal remanded the matter back to the TPO for fresh consideration based on the additional evidences provided. Consequently, ground Nos. 3 & 4 raised by the assessee were allowed for statistical purposes.

Issue 2: Admissibility of additional evidences for fresh consideration
The Tribunal examined the additional evidences submitted by the assessee, including determination of dealer prices and letters of intent. The Tribunal, after considering the submissions of both parties, decided to remand the matter back to the Assessing Officer/Transfer Pricing Officer for fresh adjudication based on the additional evidences provided by the assessee. Ground Nos. 5 to 9 were considered infructuous in light of the decision on ground Nos. 3 & 4.

Issue 3: Disallowance of business promotion expenditure
The assessee debited a significant amount under "other expenses" for business promotion expenses. The Assessing Officer disallowed a portion of this expenditure due to lack of details provided by the assessee. The Tribunal noted that the DRP had deleted the addition made in the assessment year 2014-15 after considering additional evidence furnished by the assessee. In the interest of justice, the Tribunal remanded the matter back to the Assessing Officer for fresh adjudication, allowing ground No. 9 raised by the assessee for statistical purposes.

In conclusion, both appeals of the assessee were partly allowed for statistical purposes, and the matter was remanded back to the respective authorities for fresh consideration based on additional evidences and lack of details provided.