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TMI Blog2017 (8) TMI 191X X X X Extracts X X X X X X X X Extracts X X X X ..... awal, Advocates For the Respondent : Mr. Sanjay Kumar Mr. Rahul Chaudhary, Senior Standing Counsel ORDER Dr. S. Muralidhar, J. 1. This is an appeal filed by the Assessee under Section 260A of the Income Tax Act, 1961 ( Act ) challenging the order dated 31stMarch, 2015 passed by the Income Tax Appellate Tribunal ( ITAT ) in ITA No.608/Del/2015 for the Assessment Year ( AY ) 2010-11. 2. While admitting the appeal on 19th February 2016, the following question was framed for determination by this Court: Whether in light of the decision in Maruti Suzuki Ltd. v. CIT (2016) 381 ITR 117 (Del) the ITAT was justified in holding that there was an international transaction between the Assessee and its Associated Enterprise wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O passed an order on 30thJanuary, 2014 determining the ALP of the Assessee s international transactions with its AEs, thereby, proposing an aggregate adjustment of ₹ 31.95 crores to the returned income of the Assessee. Of this proposed aggregate adjustment, an amount of ₹ 23.98 crores was towards advertising, marketing and brand promotion ( AMP ) expenses for which the TPO imputed a notional arm s length compensation by the AE to the Assessee towards AMP expenses. The remaining adjustment of ₹ 7.97 crores was towards the payment of royalty, which came to be deleted by the Dispute Resolution Panel ( DRP ) by order dated 14th November, 2014. 7. The TPO applied the Bright Line Test ( BLT ) by comparing the proportion of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8. After the DRP upheld the above order as regards AMP expenses, the Assessee went before the ITAT. In para 4 of the impugned order passed by the ITAT, the submission of the Assessee was noted as follows: It would be appreciated that the appellant, being a full fledged manufacturer and not a distributor, most of the AMP expense is incurred at its own discretion and for its own benefit for sale of 'Valvoline' products in India. In such circumstances, there does not result an international transaction and the appellant cannot be expected to seek compensation for the allegedly excess AMP expenditure incurred by it. 9. The Assessee drew the attention of the ITAT to the decision of this Court in Sony Ericsson India Pvt. Ltd. v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... determining the ALP of such AMP expenses does not arise. 13. Mr Vohra submitted that there was in fact no concession made by the Assessee on this score. He submitted that the ITAT ought not to have remanded the matter to the TPO as the material on record before the ITAT was sufficient to arrive at a conclusion on this issue. 14. Mr. Sanjay Kumar, on the other hand, submitted that it was the Assessee s own case before the ITAT that in the absence of facts and figures the matter should be sent back to the TPO for a fresh determination. He further submitted that when the TPO decided the issue in the present case, he did not have the benefit of the decision of this Court in Sony Ericsson India Pvt. Ltd. (supra). He also submitted that if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is Court. 17. Once the BLT has been declared by this Court in Sony Ericsson India Pvt. Ltd. (supra) to no longer be a valid basis for determining the existence of or the ALP of an international transaction involving AMP expenses, the order of the TPO was unsustainable in law. The mere fact that the Assessee was permitted to use the brand name Valvoline will not automatically lead to an inference that any expense that the Assessee incurred towards AMP was only to enhance the brand Valvoline . The onus was on the Revenue to show the existence of any arrangement or agreement on the basis of which it could be inferred that the AMP expense incurred by the Assessee was not for its own benefit but for the benefit of its AE. That factual foun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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