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TMI Blog2020 (7) TMI 466X X X X Extracts X X X X X X X X Extracts X X X X ..... service and procurement support service to its Associated Enterprises (AEs). It is also evident that the assessee is a 100% subsidiary of General Mills Mauritius Inc. In the audit report submitted in Form no.3CEB, the assessee furnished the details of the international transactions undertaken with the AEs and also the details of benchmarking of such transactions. As per the transfer pricing study report, the assessee benchmarked the import of food products from AEs for resale by applying TNMM as the most appropriate method and the transactions with the AEs were claimed to be at arm's length price. In the course of proceedings before him, the Transfer Pricing Officer noticed that the assessee had incurred certain expenses for promotion and marketing of the products. Therefore, he called upon the assessee to show cause as to why the AMP expenditure incurred by the assessee should not be treated as international transaction and why an adjustment on account of excessive AMP expenses leading to brand building for the AEs should not be made. Though, the assessee objected to the proposed adjustment by submitting that such expenses were incurred on promotion and marketing of certain new p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l transaction and the Hon'ble Supreme Court's decision on such SLP is yet to come, the matter may be restored back to the Assessing Officer with a direction to decide the issue after the decision of the Hon'ble Supreme Court. 7. We have considered rival submissions and perused the material on record. After carefully examining the orders passed by the Transfer Pricing Officer, learned Commissioner (Appeals) as well as other facts and materials on record, we are of the view that the facts on the basis of which similar adjustment to AMP expenses incurred by the assessee in assessment years 2011-12 and 2012-13 were made by the Transfer Pricing Officer are identical to the facts involved in the impugned assessment year. In fact, learned Commissioner (Appeals) having found the factual position to be identical has followed his earlier orders while deleting the addition made on account of transfer pricing adjustment to AMP expenses. Notably, while deciding Revenue's appeals against the decision of the learned Commissioner (Appeals) in assessment year 2011-12, in the order referred to above, the Tribunal has upheld the decision of learned Commissioner (Appeals) observing as under:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no material has been brought on record by the Transfer Pricing Officer to demonstrate that there is an agreement/arrangement with the AEs for incurring AMP expenditure to promote the brand of the AEs. Further, the entire AMP expenditure has been incurred in India and paid to third parties in India. Thus, keeping in perspective the aforesaid factual position, we have to hold that the AMP expenditure incurred by the assessee cannot come within the purview of international transaction. 12. Further, it is evident, the Transfer Pricing Officer has treated the AMP expenditure as part of international transaction following the Special Bench decision of the Tribunal in LG Electronics India Pvt. Ltd. (supra) and has also applied BLT method for computing arm's length price. It is relevant to observe, the aforesaid Special Bench decision of the Tribunal in LG Electronics India Pvt. Ltd. (supra) has been disapproved by the Hon'ble Delhi High Court in Maruti Suzuki India Ltd. (supra). The Hon'ble High Court has held that the BLT method is invalid as it is not prescribed in the statute. Various Benches of the Tribunal following the decision of the Hon'ble Delhi High Court in Maruti Suzuki ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the AE with regard to promotion of the brand of the AE by incurring AMP expenditure. However, he has not provided any factual basis on which he has drawn such inference. By merely stating that there is an arrangement between the assessee and the AE, the Transfer Pricing Officer cannot bring the AMP expenditure within the purview of international transaction. If the Transfer Pricing Officer alleges that the AMP expenditure comes within the purview of international transaction by virtue of an arrangement between the related parties, the burden is entirely upon the Transfer Pricing Officer to demonstrate the existence of such arrangement. A careful reading of the impugned order of the Transfer Pricing Officer does not reveal any such factual basis which can demonstrate the existence of an arrangement between the assessee and the AE for incurring AMP expenditure to promote the brand of the AE. That being the case, the entire approach of the Transfer Pricing Officer in determining the arm's length price of AMP expenditure is fallacious. 7. Moreover, there is no doubt that the Transfer Pricing Officer has determined the arm's length price of AMP expenditure by applying BLT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ending till the issue is settled by the Hon'ble Supreme Court. In our view, the aforesaid contention of the learned Departmental Representative is not acceptable. As per the prevailing legal position, the AMP expenditure incurred by the assessee in India cannot come within the purview of international transaction. That being the case, the adjustment made by the Transfer Pricing Officer cannot survive. Therefore, we do not find any necessity to restore the issue to the Assessing Officer. Grounds are allowed." 14. Thus, keeping in view the ratio laid down in the decisions referred to above, we have to agree with the conclusion arrived at by learned Commissioner (Appeals) with regard to the taxability of AMP expenditure. Accordingly, we uphold the decision of learned Commissioner (Appeals) by dismissing the ground raised." 8. There being no material difference in facts in the impugned assessment year, respectfully following the aforesaid decision of the Tribunal in assessee's own case, we uphold the order of learned Commissioner (Appeals) on the disputed issue by dismissing the grounds raised. 9. In the result, Revenue's appeal is dismissed. Order pronounced under rule 34(4) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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