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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 ..... bills. In the given situation, we are of the considered view that it would be in the fitness of things if the impugned order is set aside and the matter is remitted to the AO for examining this issue afresh. It is made clear that the assessee will be duty bound to submit any detail as called for by the AO in this regard. If the assessee again fails to produce such bills/details, the AO will be entitled to draw adverse inference against the assessee. - ITA No. 1933/Del/2017 - - - Dated:- 7-2-2018 - Shri R.S. Syal, Vice President and Shri Kuldip Singh, Judicial Member Assessee By : Shri Himanshu Sinha, Advocate Shri Manoneet Dalal, Advocate Department By : Shri Sanjay J. Basra, CIT, DR ORDER PER R.S. SYAL, VP: This appeal by the assessee is directed against the final assessment order dated 31.01.2017 passed by the Assessing Officer (AO) u/s. 143(3) r/w 144 C (13) of the Income tax Act, 1961 (hereinafter also called Rs.the Act ) in relation to the A.Y. 2007-08. 2. It is a second round of proceedings. The assessee preferred appeal against the original final assessment order, which was disposed off by the Tribunal on 14.01.2014 in ITA No. 5637/D/2011. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 whole, it becomes clear that the assessee s foreign AE sold goods to the assessee and then issued credit notes in respect of such sales. These credit notes have no relation whatsoever with the expenses incurred by the assessee, including AMP expenses. All other credit notes are on the same pattern which demonstrates that these were issued to the assessee for compensation against the price charged for products sold. The alleged Global policy also does not say as has been urged by the assessee. In view of these facts, we are unable to see as to how such credit notes can be considered as reimbursement of AMP expenses, when they are specifically towards the goods sold. We, therefore, countenance th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expenses before placing them under the category of Rs.AMP expenses . Each and every item of expenditure needs to be properly examined for ascertaining if it is for promotion of sales or in connection with the sales. In the absence of minute details of such expenses filed by the assessee, we are unable to characterise such expenses as Selling expenses or AMP expenses. Under these circumstances, we set aside the impugned order on this score and remit the matter to the AO/ TPO for deciding the same afresh and then exclude Rs.Selling expenses from the base amount of AMP expenses. 9. The Ld. AR contended that the TPO in the fresh round was not supposed to follow decision of the Special Bench 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the light of decision of the Special Bench in the case of LG Electronics (supra). It is observed that albeit a specific direction was given by the Tribunal for considering the impact of non-payment of royalty on the question of determining the transfer pricing adjustment of AMP expenses, the TPO did not examine such issue. Under these circumstances, we are left with no option but to send matter back to the AO/TPO for considering the effect of non-payment of royalty on the transfer pricing adjustment in the light of the decision rendered by the Special Bench in the case of LG Electronics (supra). 12. To sum up, we set aside the impugned order on the transfer pricing addition on account of AMP expenses and send the matter back to the TPO/AO for determining its ALP afresh in the light of our above discussion. Needless to say, the assessee will be allowed an opportunity of hearing in such fresh proceedings. 13. The only other issue which survives in this appeal is against software expenses. The Tribunal dealt with computer software expenses aggregating of ₹ 1.10 crore treated by the AO as capital in nature in paras 177 and 178 of its order and remitted the matter to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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