AMP expenses as an international transaction required fresh ITAT review after the assessee disputed the issue

AMP expenses could not be treated as a concluded international transaction issue where the assessee had specifically disputed that character before the DRP and ITAT. The Delhi HC held that, unlike in Sony Ericsson, the matter required fresh examination in light of the assessee's specific plea and the directions already issued in that decision. The ITAT's reliance on the Special Bench ruling in LG Electronics was therefore interfered with, and the order was set aside. The dispute was remanded to the ITAT for fresh adjudication, including whether AMP spending gave rise to an international transaction under Section 92B of the Income-tax Act, 1961.

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Issues: Whether the ITAT's order directing reconsideration of the AMP expenses dispute could stand, and whether the question of the existence of an international transaction in relation to AMP expenses under Section 92B of the Income-tax Act, 1961 required fresh adjudication by the ITAT.

Analysis: The earlier decision in Sony Ericsson had proceeded on the basis that the assessees there did not dispute the existence of an international transaction involving AMP expenses. For the relevant assessment year in the present matter, the assessee had specifically raised the plea before the DRP and the ITAT that AMP spending was part of its functions and did not constitute an international transaction. In those circumstances, the Court held that the issue could not be treated as concluded and had to be examined by the ITAT in accordance with law and the directions already issued in Sony Ericsson. The impugned order of the ITAT, which had followed the Special Bench ruling in LG Electronics, therefore required interference.

Conclusion: The ITAT's order was set aside and the matter was remanded to the ITAT for fresh consideration, including the issue whether AMP expenses gave rise to an international transaction.

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