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TMI Blog2014 (4) TMI 112X X X X Extracts X X X X X X X X Extracts X X X X ..... , Special Bench in case of LG Electronics India (P )Ltd. [2013 (6) TMI 217 - ITAT DELHI] – Decided in favour of Assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... efore us by taking the following grounds of appeal :-- "1. On the facts and in law, the learned Transfer Pricing Officer (hereinafter referred to as 'Ld. TPO') and the Learned Assessing Officer (hereinafter referred to as 'Ld. AO') erred in proposing and the Hon'ble Dispute Resolution Panel (hereinafter referred to as "Hon'ble DRP") erred in confirming the addition of Rs.11.7,99,66,691 (117.99 crore) in relation to advertisement, marketing and promotion ('AMP') expenses under section 92CA(3) of the Income Tax Act, 1961 ('Act'). 1.1 On the facts and in law, the Ld. TPO and the Ld. AO erred in proposing, and the Hon'ble DRP erred in confirming that alleged excessive AMP expense incurred by the licensee ('the Appellant') of a brand was an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ethod for determining the arm/s length price for alleged excessive AMP expenses without appreciating the fact it does not meet the criteria laid down in Rule 10B(I)(a) and Rule 10C(2). 1.4 On the facts and in law, the Ld. TPO and the Ld. AO erred in proposing, and the Hon'ble DRP erred in assuming that that alleged excessive expenses incurred in India were purely for the promotion of AE/s brand without appreciating the fact that all rewards as well as risks of incurring such expenses were entirely reaped/borne by the Appellant and any benefit to tile AE may at best is incidental in nature. 1.5 On the facts and in law, the Ld. TPO and the Ld. AO erred in erroneously including, and the Hon'ble DRP erred in confirming the action of the Ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly for the products sold in India in local languages. The domestic sales were 98.29% of the total sales with 100% manufacturing done in India. Ld. AR also claimed that the assessee is fully risk bearing manufacturer. Assessee was not a distributor. It was also pleaded that for the test of excessiveness, the next higher expenses among comparables should be considered. There is no legal or commercial basis of adoption of arithmetic mean. The ld. AR also pleaded that if advertisement expenses are considered as a separate service and not a part of manufacturing operations of the assessee then its margins for the year would increase from 4.64% on sales to 22.01% and lead to unrealistic margin and absurdity. Ld. AR also submitted that the compara ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cial Bench of ITAT in the case of LG Electronics India (P.) Ltd. (supra). The matter may be restored to Assessing Officer for deciding accordingly. 7. We have heard both the sides on this issue. The issue under consideration is related to the AMP expenses incurred by assessee and the legal issues arising out of the same. ITAT, Special Bench in the case of LG Electronics India (P.) Ltd. (supra), has already dealt with the legal issues raised in the appeal. For the quantification, the issue has been restored back to the file of the Assessing Officer. Therefore, in the interest of justice and equity, we find it appropriate to restore the issues to the file of the Assessing Officer to be decided in view of the decision of ITAT, Special Bench i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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