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TMI Blog2022 (11) TMI 384X X X X Extracts X X X X X X X X Extracts X X X X ..... n terms of the judgment of the Division Bench in the aforesaid Income Tax Appeals, however, it is made clear that the present decision will abide by the judgment of the Supreme Court [ 2018 (5) TMI 2131 - SC ORDER] preferred by the Revenue against the order passed by this Court in [ 2017 (5) TMI 1223 - DELHI HIGH COURT] - HON'BLE MR. JUSTICE MANMOHAN AND HON'BLE MS. JUSTICE MANMEET PRITAM SINGH ARORA Appellant Through: Mr. Zoheb Hossain, Sr. Standing Counsel for the Revenue with Mr. Vipul Agrawal and Mr.Parth Semwal, Advocates. Respondent Through: Mr.Mayank Nagi with Mr.Tarun Singh, Advocates. J U D G M E N T MANMEET PRITAM SINGH ARORA, J (ORAL): CM APPL Nos. 8721-22/2020 in ITA 174/2020 CM APPL. Nos. 8825/2020, 8827/2020 in ITA 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the Bright Line Test to the alleged AMP expenditure of the Assessee including incentives paid to the travel agent; and substantive addition has been made by applying Cost Plus Method to the AMP expenditure while excluding payments of expenses made to the travel agent. In the assessment years under consideration there is also an addition on account of disallowance made under Section 14A of the Act. 3. Learned counsel for the Appellant, Revenue, states that the ITAT erred in deleting the addition on account of AMP expenditure and fell in error in holding that provisions of Chapter X of the Act cannot be invoked for the said expenses. He states that the ITAT failed to consider that as per the distribution agreement dated 01st October, 2004, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on here that qua both the protective and substantive addition made on account of AMP expenditure, the ITAT has observed that the said action of the TPO appears to have been prompted due to the decision of this Court in the case of Sony Ericsson Mobile Communications India (P.) Ltd. v. Commissioner of Income-tax III, (2015) 374 ITR 118, wherein, inter alia, this Court has held that the Bright Line Test cannot be used as a method for computing Arm's Length Price and selling expenses are to be excluded from the ambit of AMP expenditure. The ITAT also noted the decision of its predecessor bench in Assessee s own case for AY 2007-08, wherein it was observed that incentive paid to travel agents constitutes selling expenses and are to be exclu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r AY 2009-10 and 2010-11 deleting the disallowance on account of AMP expenditure has also been upheld by this Court in ITA 154/2017 and ITA 548/2018 respectively. 9. With respect to the disallowance under Section 14A of the Act, it is admitted that no exempt income was earned by the Assessee in AYs 2012-13 and 2013-14. The ITAT following the judgment of this Court in Cheminvest Ltd. v. Commissioner of Income Tax - VI, (2015) 378 ITR 33 , has deleted the said disallowance made on account of Section 14A of the Act. 10. We are of the considered view that the deletion of the said disallowance under Section 14A of the Act, by the ITAT is correct in the facts of this case. The contention of the Revenue that ITAT failed to consider the CBDT Circul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 11 May 2014, the decision of this Court in Cheminvest Ltd.(supra) requires reconsideration. XXX XXX XXX 24. For all of the aforementioned reasons, this Court is of the view that the CBDT Circular dated 11 May 2014 cannot override the expressed provisions of Section 14A read with Rule 8D. 11. Admittedly, the issues of law and fact raised by the Appellant in the present appeals, with respect to the addition on account of AMP expenditure, are similar to the case decided by the Division Bench of this Court in ITA Nos. 154/2017, 548/2018 and 901/2019. 12. With respect to the deletion of the disallowance made under Section 14A of the Act, the said issue is also covered against the Revenue by the decision of this Court in Cheminvest (supra) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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