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TMI Blog2019 (9) TMI 1627X X X X Extracts X X X X X X X X Extracts X X X X ..... Apex Court would be binding upon all the authorities. In view of the above, we set aside the orders of authorities below and restore the matter to the file of the Assessing Officer. We hold that as per the facts of the case and the legal position as of now and discussed above in this order, the adjustment made by the TPO/DRP/AO in respect of AMP expenses is not sustainable. However, if the above decisions of Hon'ble Jurisdictional High Court which is under consideration before the Hon'ble Apex Court is modified or reversed by the Hon'ble Apex Court, then the Assessing Officer would pass the order afresh considering the decision of Hon'ble Apex Court. - ITA 795/2019 - - - Dated:- 3-9-2019 - Mr. Justice Vipin Sanghi And M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the service providers identified by the TPO for the purpose of comparison were actually engaged in Knowledge Process Outsourcing (KPO) and were, therefore, not comparable in terms of the services rendered by the Assessee. 8. The DRP-II vide its order dated 16.11.2015 found merit in the said grievance of the Assessee, and the direction issued by it reads as follows:- DRP Directions: The DRP has considered the submissions as also the TP Study and the Order of the TPO. The contention of the assessee is found to be correct. The TPO erred in characterizing the provision of Information Technology ('IT') support services involving payroll processing, accounts processing etc. services as that of software development services. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aised the said issue before the ITAT, the ITAT should have remanded the matter back to the TPO, if it found that 6 out of the 10 service providers were not comparable on account of the fact that they were engaged in providing KPO services. The other issue raised by the Appellant relates to adjustment of AMP expenses. 14. We have considered the submission of learned senior standing counsel for the department and learned counsel for the Respondent. It is not disputed that, as a matter of fact, the 6 companies taken note of hereinabove are indeed providing KPO Services alone, and they are not engaged in providing ITES services like the Respondent assessee. 15. The aforesaid being the position, and considering the fact that the TPO had al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e circumstances, the order of TPO passed by making BIT as basis of the ALP adjustment is not sustainable in the eyes of law. 22. Furthermore, Hon'ble Delhi High Court in subsequent decisions viz. Bausch Lomb Eye Care (India) Pvt. Ltd. viz Additional CIT (2016) 3S11TR 227 (Del.) and Honda Siel Power Products Ltd. v. Dy. CIT (2016) 237 Taxman 304 held that it is for the Revenue to firstly discharge the onus to prove the existence of an international transaction between the taxpayer and its AE and only thereafter ALP of international transactions involving AMP can he computed. 23. It is further contended by the ld. AR for the taxpayer that quantitative adjustment made by the TPO on account of AMP expenses is not permissible within ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 81% of its turnover is from the sale of its manufacturing in India. Moreover, without prejudice, it is the case of the taxpayer that despite the directions issued by the ld. DRP, the TPO has wrongfully proceeded to consider selling and distribution expenses as part of the AMP expenses for the purposes of applying the bright line test. 26. In view of what has been discussed above, we are of the considered view that since the taxpayer is a full-fledged manufacturer as 81% of its turnover is from the sale of its manufactured goods in India and the entire AMP expenses have been incurred by it to enhance its sale in India and not for promoting the brand of its AH and for creating intangibles for its AH, the alleged excess AMP expenditure do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Officer. We hold that as per the facts of the case and the legal position as of now and discussed above in this order, the adjustment made by the TPO/DRP/AO in respect of AMP expenses is not sustainable. However, if the above decisions of Hon'ble Jurisdictional High Court which is under consideration before the Hon'ble Apex Court is modified or reversed by the Hon'ble Apex Court, then the Assessing Officer would pass the order afresh considering the decision of Hon'ble Apex Court. In those circumstances, he will also allow opportunity of being heard to the assessee. 18. Since the aforesaid issues stand covered by the earlier decisions of this Court, no question of law arises for our consideration. 19. The appeal is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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