9911796707
TMI Blog2021 (9) TMI 1079X X X X Extracts X X X X X X X X Extracts X X X X ..... 580 - DELHI HIGH COURT] - CIT(A) following Hon'ble Delhi High Court, being a binding precedent has deleted the addition. Also CIT(A) has noted that in subsequent assessment years, i.e., 2012-13, 2013-14 and 2014-15, the Assessing Officer himself has not made any transfer pricing adjustment on account of AMP expenses in same set of circumstances and, therefore, keeping in view of the principle of the consistency, the Assessing Officer is not justified in making adjustment in the year under consideration. Assessee has already been remunerated for the marketing expenses incurred on behalf of the AEs along with commission markup, and, therefore, there was no requirement of making separate AMP addition in the case of the assessee. No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reciating that fact that as per India Transfer Pricing legislation, compensation for the function performed AMP services rendered to the AEs in this case] needs to be benchmarked separately? 5. That the grounds of appeal are without prejudice to each other. 6. That the appellant craves leave to add, alter, amend or forego any ground(s) of the appeal raised above at the time of hearing. 2. The Facts in brief of the case are that in the scrutiny assessment completed on 07/03/2014, the Assessing Officer made addition of ₹ 4,13,60,114/- for transfer pricing adjustment on account of Advertisement, Marketing and Promotion (AMP) expenses and disallowance of late payment of interest amounting to ₹ 37,980/-. On the issue of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anufactured by the AE during the year under reference. The marketing support provided by the appellant primarily encompasses sponsorship of seminars and conferences of prominent associations of the medical community and advertisement campaigns in the print media while service support pertains to warranty repair and exchange of damaged equipments sold by Karl Storz Germany's dealers in India. In return for the services rendered and in return for the significant expenses incurred by the appellant on marketing, Karl Storz Germany pays a commission to the appellant on the sales made by it's distributors in India. The appellant also provides post warranty repair and maintenance service on chargeable basis. 5.3 During the year under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng activities undertaken on behalf of the AE for which the appellant has specifically received commission income. 5.8 It is also noted that the year under reference is the first year in which a transfer pricing adjustment has been made by the TPO on the basis of 'Bright Line Test' using SBI PLR as mark up. It is also seen that a transfer pricing adjustment were made by the TPO in the subsequent year-Le AY 2011-12, which has been related by the CIT(A). In AY 2011-12, the appellant had prepared separate segmental accounts for the marketing segment and used TNMM as the most appropriate method. Transfer pricing adjustments on account of AMP expense had not been made in AYs 2012-13, 2013-14 and 2014-15. 5.9 In the year under re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as declared when matches with the comparables would result in affirmation of the transfer price as the arm's length price. Then to make a comparison of a horizontal item without segregation would be impermissible. 5.10 In accordance with the principle of consistency and respectfully following the order of the jurisdiction High Court in the case of Sony Ericsson(supra) the transfer pricing adjustment made by the AO on account of AMP expenses is deleted. The grounds of appeal are decided in favor of the appellant. 7.2. In our opinion, the contention of the Learned DR that the assessee is manufacturer is not found to be correct. The assessee has reported international transaction of purchase of trade goods and capital goods fro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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