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TMI Blog2019 (3) TMI 75X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome of Rs. 30,67,10,630/- as against returned income of Rs. - 6,00,66,615/- by making following additions: a) purported substantive addition of Rs. 24,79,23,197/- made by Ld. Transfer Pricing Officer ('TPO') basis self- contradictory and categorical finding that "no adverse inference is drawn in respect of other international transaction [meaning except advertising, marketing and promotion expenses (AMP)] and b) Addition of Rs. 11,88,13,177/- made by ld. TPO in respect of services availed by the Appellant from its associated enterprises (AEs) based on mistaken notions and contradictory assumptions. Transfer pricing adjustment relating to AMP expenditure: On the facts and in circumstances of present case and in law: 2. That Ld. AO/TPO and DRP have erred in making adjustment purportedly in relation to AMP expenses incurred by Appellant, disregarding decision of Hon'ble Delhi High Court in the appellant's own case for earlier years. 3. That impugned order erred in not applying principles laid down in decision by Hon'ble High Court even while noting there is no distinction between 'distributor' and 'manufacturer' & accepting absence of tools to measure impact under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the reasonableness, quantum, and commercial expediency of AMP expenditure incurred by the Appellant. 13. Impugned order erred in not appreciating that AMP expenses were incurred by Appellant in normal course of business, were wholly and exclusively for generating domestic sales for its business operations and further erred in presuming that such expenses resulted in creation of marketing intangibles for AEs. 14. Ld. AO/DRP/TPO have erred in not appreciating that benefit arising from incurrence of AMP expenses by Appellant has been received by the Appellant and benefit, if any, resulting to AEs is merely incidental. 15. While computing protective adjustment, Ld. AO/TPO and Hon'ble DRP have erred in holding that AMP expenditure incurred by the Appellant, is separate 'international transaction', disregarding findings of Hon'ble Delhi High Court in the Appellant's own case for earlier years. 16. Without prejudice to fact that Appellant was fully compensated for its efforts as is evident from arm's length margins earned as distributor, Ld. AO/ Ld. TPO/ Hon'ble DRP in not appreciating that AMP expenses incurred by Appellant did not view of an "international ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 274 of the Act. 24. That on the facts and circumstances of the case and in law, the learned AO has erred, in charging interest under Sections 234B and 234D of the Act. The above grounds are independent and without prejudice to each other. 3. The assessee company, Bausch & Lamb Eyecare (India) Pvt. Ltd. is wholly owned subsidiary of Bausch & Lamb South Asia Inc. USA and engaged in the business of manufacturing Sense care solutions and trading of contact lenses and protein removal enzyme tablets. The company is also engaged in the trading of ophthalmic intra ocular lenses and surgical equipments. The return of income declaring loss of (-) Rs. 6,00,66,615/- under normal provisions of the I.T Act, 1961 and Book Profit (Loss) of (-) Rs. 9,24,25,408/- was filed on 30/11/2014. The case was selected for scrutiny and first notice u/s 143(2) of the Act dated 31/8/2015 was issued and served on assessee. Subsequently, notice u/s 142(1) of the Income Tax Act, 1961 was called for. In response thereto, CA & ARs of the assesses company attended the proceedings from time to time and filed necessary details as called for which were examined and placed on record. During the previous year u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taxpayer company should have been compensated by the AE at Rs. 12,73,69,491/- plus mark up @ 7.19% for undertaking advertisement, marketing and publicity activities purely for AE and most importantly creating a marketing intangible for the AE. The net adjustment, therefore, works out to Rs. 13.65.27,35?/-on protective basis. As regards to intra group services, the DRP made the following observation towards the adjustment of Intra Group Services: ''Having considered the submission of the assessee, we find that (he DRP in AY 2011-12 & 2012-15 have upheld the TPO's action, in view of the SLP under process of being filed. In view of the fact that Hon'ble Delhi High Court has decided the issue in favour of the assessee in respect of IGS payments, we direct the TPO/AO to verify and ascertain as to whether the SLP filed in assesses s case against the High Court's order dated 23.12.2015 and 17.04.2017 contains the grounds relating to IGS. If the grounds of IGS have been preferred in SLP, then only the TP adjustment should he retained, otherwise not " The issue has been taken as a ground for filling the SLP in the assessee's own case for the A.Y. 2011-12 and the said SLP is still pen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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