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TMI Blog2023 (8) TMI 1272X X X X Extracts X X X X X X X X Extracts X X X X ..... promotion to the domestic parties cannot be termed as an international transaction specifically when the TPO has not been able to prove that the expenses incurred were not for the business carried out by the appellant in India. Disallowance u/s 14A - when assessee has earned no exempt income - HELD THAT:- Upon hearing both the sides and perusing the records, we find that this issue is squarely covered in favour of the assessee by the Decision of Cheminvest Ltd. [ 2015 (9) TMI 238 - DELHI HIGH COURT] and CIT vs. Holcim India (P) Ltd. [ 2014 (9) TMI 434 - DELHI HIGH COURT] . Accordingly, this issue is decided in favour of the assessee. - Shri Shamim Yahya, Accountant Member And Shri Challa Nagendra Prasad, Judicial Member Fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and 2009-10 to 2015-16 duly placed on record. 3.2 That on facts and in law the TPO 1 DRP erred in disproving the benchmarking analysis adopted by the appellant without following the methodology and approach recognised under section 92C(3) of the Act. 4. That on facts and in law the TPO erred in holding and the DRP inter alia erred in upholding/observing that: (i) Appellant had incurred AMP expenditure of Rs. 9,56,91,630/- on promotion of proprietary marks and for development of marketing intangible for the benefit of AE. (ii) AMP expenditure of Rs. 9,56,91,630/- incurred by the assessee is an International Transaction u/s 92B of the Act. (iii) Expenditure of Rs. 8,26,57,188/- incurred by the assessee on payment of incentive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction following an aggregate approach. 6. That on facts and in law the AOITPO/DRP erred in making 1 upholding Protective TP Adjustment on account of AMP expenses invoking Bright Line Method . 7. That on facts and in law the AOITPO/DRP erred in making 1 upholding Substantive TP Adjustment on account of AMP expenses invoking Cost Plus Method . 8. That without prejudice, while benchmarking alleged AMP as a separate transaction the TPO has erred in applying a mark-up of 23.90% while computing adjustment on a substantive basis, and 9. That on facts and in law the AO/DRP erred in making/upholding disallowance of Rs. 3,52,66,624/- u/s 14A of the Act. 9.1 That on facts and in law the AOIDRP erred in not appreciating that provisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ged in the business of providing data processing and related services to its AE's. Assessee is responsible for providing software access to the subscribers of Amadeus Products and Computer Database within the Indian sub-continent. The territory of India includes India, Bangladesh and Nepal. The main activity of the assessee is to provide connectivity to host system by creation/modification/upgradation of computer programmes online. Assessee has a Data Processing Centre, which provides the above services to the associated enterprise. Undisputedly, the main Data Processing and Subsidiary Distribution Activities of the assessee have been held to be at Arm s Length Price (ALP) applying TNMM by the TPO. 4. Apropos issue of AMP Adjustment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Line 54,54,368 Expenditure on AMP by assessee 9,56,91,630 Expenditure in excess of Bright Line 9,02,37,262 Markup (23.90%) 2,15,66,706 Adjustment 11,18,03,968 (ii) Since issue relating to applicability of BLT Method has been decided against the Revenue by Hon ble Delhi High Court in case of Sony Mobile reported in 374 ITR 18 (Del), the TPO has also made a Substantive Adjustment applying Cost Plus Method as under :- Particulars Amount (Rs.) Total Expenditure on AMP by the taxpayer 9,56,9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... brand promotion between assessee and its AE, no TP adjustment for alleged AMP expenses can be made. ITAT in AY 2009-10 has held as under :- Considering the material facts like the absence of an agreement, arrangement or understanding between the appellant and ifs associated enterprise for sharing the advertisement, marketing and promotion expenses or for incurring the advertisement, marketing and promotion expenses for the sole benefit of the associated enterprise, payments made by the appellant under the head advertisement, marketing and promotion to the domestic parties cannot be termed as an international transaction specifically when the learned Transfer Pricing Officer has not been able to prove that the expenses incurred we ..... X X X X Extracts X X X X X X X X Extracts X X X X
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