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TMI Blog2022 (10) TMI 989X X X X Extracts X X X X X X X X Extracts X X X X ..... e in law which would merit reconsideration of said issues of AMP in the present proceedings. We, therefore, hold that the ITAT has properly and correctly assessed the fact and law while concluding that services of AMP are not international transactions in light of the provisions of sub-clause (d) of clause (i) of Explanation to Section 92B. - ITA 548/2018 - - - Dated:- 18-10-2022 - HON'BLE MR. JUSTICE MANMOHAN AND HON'BLE MS. JUSTICE MANMEET PRITAM SINGH ARORA Appellant Through : Mr. Sanjay Kumar, Senior Standing Counsel for Revenue along with Ms. Easha Kadian, Advocate. Respondent Through : Mr. Mayank Nagi and Mr. Tarun Singh, Advocates. J U D G M E N T MANMEET PRITAM SINGH ARORA, J (ORAL): 1. Present appeal has been filed by the Appellant, Revenue, under Section 260A of the Income Tax Act, 1961 ( the Act ), to set aside the impugned order dated 23rd October, 2017, passed by the Income Tax Appellate Tribunal ( ITAT ) in ITA No. 1835/Del/2015 for the Assessment Year ( AY ) 2010-11. 2. The following question of law was framed on 20th January, 2020: Whether the Ld. ITAT is justified in holding that provisions of services of market devel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounsel for the Revenue, states that the ITAT erred in law while holding that the provision of services of market development (service of carrying out advertisement, market and business promotion i.e., AMP) are not international transaction by ignoring the provisions of sub-clause (d) of clause (i) of Explanation to Section 92B of the Act of 1961. He states that even though the transfer pricing adjustment made on account of AMP expenses was deleted by the ITAT in AY 200910, which order was upheld by this Court in ITA No. 154/2017 decided on 22nd May, 2017, since the principles of res judicata are not applicable in tax proceedings, the Court can examine the legality of the impugned order passed by the ITAT. 8. In reply, learned counsel for the Respondent, Assessee, has drawn our attention to another order of the ITAT dated 27th February, 2019, in Assessee s own case for subsequent AY 2011-12, wherein similarly the ITAT has deleted the transfer pricing adjustment made on account of AMP expenses and thereafter, this Court in ITA No. 901/2019 vide order 16th October, 2019, upheld the said order of the ITAT. 9. He states that this Court declined to refer any question of law for AY ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o hold that the expenses incurred on AMP does not constitute an international transaction between the Assessee and its AE. The findings of the ITAT in previous AY 2009-10, as relied upon in the impugned order reads as under:- 8.2 On a careful consideration of the facts on record we are of the opinion that there is nothing on record to show that the appellant by incurring AMP expense wanted to promote its AE. The Ld TPO has failed to prove that the appellant by incurring AMP expenses wanted to benefit the AE and not to promote its own business. Submission of Ld TPO that clauses 10.02, 10.5, 11.01 and Article XVI of the agreement indicate existence of a transaction for brand promotion is not supported by contents of those clauses. Appellant's objections before the learned DRP, which we have quoted above, are acceptable. These clauses nowhere provide that the appellant will be incurring brand promotion expenses for and on behalf of its AE or solely for its business purposes and interests. Agreement dated 01st October 2004 between appellant and its AE is based upon revenue sharing model in which 46% revenue is being shared by Amadeus Spain with the appellant and hence it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent is concerned, it is seen that certain transactions listed in the Explanation under clauses (i)(a) to (e) to Section 92B are described as an 'International transaction'. This might be only an illustrative list, but significantly it does not list AMP spending as one such transaction hence amendments to section 92B by Finance Act 2012 also do not support the case of the Revenue. Lastly on the observations made by the Ld. DRP that since the appellant a Dependent Agency PE of its AE, hence all its expenses on AMP are being incurred by it for the benefit of AE we would like to state that this is also entirely irrelevant. While alleging as above the Ld DRP has not appreciated that appellant has been held to be a Dependent Agent Permanent Establishment of Amadeus Spain for determination of Amadeus Spain's income, which is taxable in India. Moreover, we may refer here decision of Hon'ble Jurisdictional High Court in case of Whirlpool of India Ltd (supra) wherein it is held by the Hon'ble High Court as under: 37. The provisions under Chapter X do envisage a 'separate entity concept'. In other words, there cannot be a presumption that in the present cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... admits that there are no distinguishable facts in the present assessment year from that of AY 2009-10 as well as 2011-12. 16. The learned counsel for the Revenue has admitted that the agreement which is subject matter of scrutiny in AY 2009-10, AY 2010-11 (the year under consideration) and AY 2011-12 is the same agreement. The ITAT for AY 2009-10 and 2011-12 has given a finding on facts that the AMP expenses incurred by the Assessee cannot be termed as an international transaction and that there was no evidence on record to enable the TPO to hold that the expenses were not incurred for the business carried out by the Assessee in India. The said finding of ITAT has been upheld by the predecessor benches of this Court in favour of the Assessee. 17. The ITAT while upholding deleting the said addition, has followed the judgment of this Court in Bausch and Lomb Eyecare Pvt. Ltd. (Supra), wherein this Court held as under:- ... 64. In the absence of any machinery provision, bringing an imagined transaction to tax is not possible. The decisions in CIT v. B.C. Srinivasa Setty [1981] 128 ITR 294 and PNB Finance Ltd. v. CIT [2008] 307 ITR 75 make this position explicit. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relates to AY 2012-13. Not doing so will only result in uncertainty and displacement of settled expectations. There is a significant value which must attach to observing the requirement of consistency and certainty. Individual affairs are conducted and business decisions are made in the expectation of consistency, uniformity and certainty. To detract from those principles is neither expedient nor desirable. 8. Consequently, this Court is of the view that all similar matters should receive similar treatment except where factual differences require a different treatment so that there is assurance of consistency, uniformity, predictability and certainty of judicial approach. (Emphasis supplied) 20. The law on the issue of AMP is well settled by the aforesaid judgements of this Court and the same has been consistently applied by the appellate authorities below and the predecessor benches of this Court to the facts of the Assessee in AY 2009-10 and AY 2011-12. Therefore, we are unable to agree with learned senior standing counsel for the Revenue that there is any change in law which would merit reconsideration of said issues of AMP in the present proceedings. We, therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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