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TMI Blog2018 (4) TMI 31X X X X Extracts X X X X X X X X Extracts X X X X ..... l against the original final assessment order, which was disposed off by the Tribunal on 14.01.2014 in ITA No. 5637/D/2011. The Tribunal, inter alia, restored certain issues of transfer pricing adjustment on account of Advertisement, marketing and promotion (AMP) expenses to the TPO/AO for fresh determination, which we will advert to hereinafter and also expenses on Software. 3. Firstly, we are espousing transfer pricing addition on account of AMP expenses. Pursuant to the aforesaid Tribunal order, the TPO proposed transfer pricing adjustment of Rs. 81,85,60,715/- vide his order dated 21.01.2016. The assessee carried the matter before the Dispute Resolution Panel (DRP), which gave certain directions. The TPO gave effect to such directions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y way of credit notes towards all expenses. It was, therefore, submitted that the credit notes should have been treated as reimbursement of AMP expenses incurred by the assessee in the peculiar facts of the case. We have gone through copies of the credit notes, which have been placed on record. The first one is at page No. 362 of the paper book. This credit note refers to dates 12.04.2006, 23.11.2006, 29.12.2006, 06.12.2006, 01.01.2007 at the top right side. On a specific query, it was submitted that the dates referred on the credit note are the Rs.purchase transactions' of the assessee. Narration given in the credit note is ; "Credit note against transfer price charged for the period 01.04.2006 to 31.03.2007". On going the credit note as a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expenses of Rs. 28,27,04,656/-; and Dealer Commission of Rs. 8,71,07,635/-. He treated Salesmen Training Expenses of Rs. 14,81,01,235/- and Dealer Commission of Rs. 8,71,07,635/- as Selling expenses and rest of the amount as AMP expenses. The assessee contended before the DRP that the TPO did not properly examine the nature of expenses. The DRP directed the TPO to re-examine the nature of such expenses and exclude Selling expenses, if any, and take the rest as expenses towards brand building. Giving effect to the DRP direction, the TPO vide order dated 27.01.2017 considered total of Rs. 62.49 crore as selling expenses and recomputed the amount of transfer pricing adjustment at Rs. 10.56 crore. A rectification order was passed thereafter in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of LG Electronics (supra) as ordained by the Tribunal. Relying on certain decisions rendered by the Hon'ble Delhi High Court, he contended that the AMP expenses have been held to be not an international transaction. Countering this argument, the ld. DR also relied on a series on decisions in which the Hon'ble Delhi High Court has held AMP expenses to be an international transaction. On a specific query, it was admitted by the ld. AR that the Hon'ble Punjab & Haryana High Court is the jurisdictional High Court and so far no decision has been rendered by it on the issue. The ld. AR further stated that the assessee has preferred an appeal against the original tribunal order before the Hon'ble High Court on the issues concerning th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the Tribunal pursuant to which these proceedings have arisen. Such issues have been challenged by the assessee before the Hon'ble High Court, which is the right forum to deal with the same. We therefore, approve the view of the AO in not examining any fresh contentions de hors the remit order by the Tribunal. 11. The Ld. AR submitted that the assessee did not pay any royalty to its AE. It was pointed out that the Tribunal in the first round noted this fact in paras 18.3 and 18.4 of its order and thereafter directed the TPO to consider the impact of this factor on the determination of transfer pricing adjustment towards AMP expenses in the light of decision of the Special Bench in the case of LG Electronics (supra). It is observed that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... did not furnish any fresh details before the AO and hence no larger relief could be given. The assessee is again aggrieved before the Tribunal. 14. After considering the rival submissions and perusing the relevant material on record, we find that there is a specific direction given by the Tribunal for considering the nature of software expenses of Rs. 1.10 crore as capital or revenue in the light of Special Bench decision in Amway India (supra). This exercise entails going through all the bills and then examining the period during which their benefit would run. This could have been done by the AO only after going through the bills depicting the nature of expenses, which were not filed by the assessee. The ld. AR contended that roughly 60% ..... X X X X Extracts X X X X X X X X Extracts X X X X
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