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TMI Blog2015 (6) TMI 928X X X X Extracts X X X X X X X X Extracts X X X X ..... The endeavour Should be to ascertain and satisfy whether the gross/net profit margin would duly account for AMP expenses. When figures and calculations as per the TNM or RP Method adopted and applied show that the net/gross margins are adequate and acceptable, the appeal of the assessed should be accepted. Where there is a doubt or the other view is plausible, an order of remand for re-examination by the Assessing Officer/TPO would be justified. - The issue may be remanded back to the file of the AO for fresh verification of facts. - Decided in favour of assessee for statistical purposes. - I.T.A. No. 608/DEL/2015 - - - Dated:- 31-3-2015 - Shri J. S. Reddy And Shri George George K.,JJ. For the Petitioner : Sh. Ajay Vohra, Adv. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oyees. 4. Ld. Counsel of the Assessee, Shri Ajay Vohra, submitted vide his Brief Note as under:- The Hon ble Delhi High Court in the batch of several appeals with Sony Ericsson Mobile Communications India Pvt. Ltd. being the lead matter, dealt with the Transfer Pricing Dispute related to AMP expenses. The Delhi High Court, while primarily dealing with several cases of distributors, rejected the taxpayer's contention that AMP expenses do not give rise to international transactions, holding that in most cases the appellant have submitted that the international transactions between them and the AE, resident abroad included the- cost I value of the AMP expenses, which the appellant had incurred in India. In the case of the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exercise. The Court held that the contention of the Revenue that any excess expenditure beyond the bright line should be regarded as separate international transactions is unwarranted and amounts to judicial legislation. Accordingly, the Court held that such approach is not mandated either in the Act or in the Rules. Even otherwise, it is submitted that Hon'ble Delhi High Court also reversing the view of the Special Bench of the Tribunal, held that Clubbing of closely linked (including continuous transactions) is permissible in appropriate cases. The Court further held that once the Revenue accepts the TNMM as the most appropriate method, then it would be inappropriate for the Revenue to treat a particular expenditure like AMP as a s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of benchmarking its international transactions, considered TNM method as the most appropriate method. It was submitted that the OP/OC ratio of the appellant in its Manufacturing segment at 21.89% was higher than average OP/OC of the 9 comparable companies at 7.67%. Similarly, in the case of trading segment, OP/Sales of appellant at 10.53% was found to be higher than average OP/Sales of 8 comparable companies at 4.24%. Accordingly, the international transactions undertaken by the appellant were found to be at arm's length price in terms of Indian Transfer Pricing Regulations. It is submitted that the aforesaid entity-vide operating profit margin, being higher than that of the comparable companies selected in the Transfer Pricing stud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... India Limited) vide its judgment dated 16.3.2015 in ITA NO. 16/2014 and other cases at Page No. 135 vide para no. 193 held as follows:- 193. We would not like to go into several factual aspects for the first time, for the factual matrix has not been examined and ascertained by the Tribunal. Moreover, in terms with our legal finding, factual findings will have to be examined. An order of remand for de novo consideration to the Tribunal would be appropriate because the legal standards or ratio accepted and applied by the Tribunal was erroneous. On the basis of the legal ratio expounded in this decision, facts have to be ascertained and applied. If required and necessary, the assessed and the Revenue should be asked to furnish details or t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AMP expense is allowed for statistical purposes. 8. The second ground is on the disallowance of ₹ 45,000/- on account of employee referral fee paid to employees. Ld. Counsel of the assessee submitted that he has a good case on merit, but in view of the smallness of the amount, he would not press the same with a rider that the concession should not a precedent, in future. In view of the above submissions, we dismiss the ground no. 3 of the assessee, but this shall not be a precedent, as the issue has not been adjudicated on merits. 9. As regards ground no. 4 is concerned, which is related to levying interest under section 234B, 234C and 234D, the same is consequential in nature. 10. As regards ground no. 5 is concerned, wh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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