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TMI Blog2023 (1) TMI 658X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal:- "1. That on the facts and circumstances of the case and in law, the impugned final assessment order passed by the Ld. AO/ Deputy Commissioner of Income Tax, Transfer Pricing Officer - 3(3)(2) ("Ld. TPO") is bad in law. 2. That on the facts and circumstances of the case and in law, the Ld. AO/ Ld. TPO has erred in making a substantive addition by adjusting the profit margins of the comparable companies for differences in intensity of AMP functions and comparing them with the results achieved by the assessee for arm's length testing purposes. In doing so, the Ld. TPO Ld. AO erred in: 2.1. applying an alleged economic adjustment on account of difference in intensity of functions based upon "Other Expenses/ Sales" ratio, wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e fact that there are no legal sanctions under Indian tax laws for proposing any protective adjustment on grounds of difference in arm's length pricing of the international transactions of any tax payer; 3.2. not appreciating the fact that application of BLT is not having any legal sanction under Indian TP provisions and is also not tenable in the light of recent judicial precedents on the issue; 3.3. not appreciating that the AMP expenses incurred by the appellant are out of the absolute need of the business operations relating to distribution function of the assessee and are not incurred for creation of any marketing intangibles; 3.4. proposing an erroneous approach for conducting the analysis as per BLT application, without ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case was referred to the Transfer Pricing Officer by this office on 05.12.2014: as the assessee had shown international Transaction with its Associated Enterprises (AEs) of Rs.38.50 crore. The TPO deliberated upon the value of International transactions as shown by the assessee in respect of purchases, sale and other support services. The Ld. TPO determined the Arm's Length Price of the international transaction relating to purchases at Rs. 2,25,90,61,000/- as the assessee has shown Rs. 2,54,36,522,169/-. The TPO has directed that the AO shall reduce the expenses by Rs. 28,45,91,169/- on account of purchases. Accordingly, an addition of Rs. 28,45,91,169/- being made while computing the income of the assessee for the year under consideration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1088/Del/2016 Assessment Year 2011-12 (iv) Order dated 19/10/2022 in ITA No. 6151/Del/2013 Assessment Year 2009-10. 7. The Ld. Counsel further submitted that in the present appeal the Ld. TPO held that there exist two international transactions under purchase of finished goods and incurring of excessive AMP Expenses on behalf of the A.E. which requires to be deleted by following the Assessee's own case. 8. Per contra, the Ld. DR has relied on the orders of the Lower Authorities but could not produce any contrary judicial pronouncements. 9. We have heard the parties perused the material available on record and gave our thoughtful consideration. The issue involved in the present appeal is, whether the AMP expenditure incurred by the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as relied upon a decision of the ITAT, Special Bench in case of LG Electronics India Pvt. Ltd. (supra). However, the ratio laid down in case of LG Electronics India Pvt. Ltd. (supra) has been disapproved by the Hon'ble Jurisdictional High Court, hence, no more a good law. 3.6 Be that as it may, it is observed, identical issue came up for consideration before us in assessee's own case for the assessment year 2008-09. While deciding the issue in ITA No. 5528/Del/2012, dated 16.12.2019, the Coordinate Bench has held that the AMP expenses incurred by the assessee does not fall within the definition of international transaction. The Bench further disapproved the determination of ALP by applying BLT method. Ultimately, the adjustment made on a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wing the order made in Assessee's own case as discussed above, we delete the addition made by the Assessing Officer by allowing the Ground No. 1 & 2. 12. The Ground No. 3 is regarding protective addition made by the A.O/TPO in respect of AMP expenditure incurred by the assessee by applying the of Bright Line Test. 13. The TPO was of the opinion that there is exist two International Transactions under purchase of finished goods and incurring of excessive AMP Expenses on behalf of the A.E. The Ld. TPO/A.O. held that the assessee being a distributor is covered by the High Court Judgment in the case of M/s Sony Ericson wherein the excessive AMP expenditure is considered to be International Transaction. As per the TPO there exist international ..... X X X X Extracts X X X X X X X X Extracts X X X X
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