Appeal allowed for statistical purposes, remitted to AO/TPO for fresh determination. Stay Application dismissed.

The appeal was allowed for statistical purposes, and the matter was remitted to the AO/TPO for fresh determination in line with the LG Electronics case. The Stay Application became infructuous due to the decision on the appeal, and it was dismissed accordingly.

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Issues:
Transfer Pricing Adjustment on account of AMP expenses.

Analysis:
The appeal was against the Transfer Pricing Adjustment on account of AMP expenses for the assessment year 2009-10. The Special Bench of the Tribunal in LG Electronics India Pvt. Ltd. case decided that incurring AMP expenses towards brand promotion constitutes an `international transaction'. The Special Bench listed 14 parameters for determining the correct ALP of AMP expenses, applicable to both manufacturers and distributors. The AO/TPO should ascertain if the Indian AE is a distributor or holds a manufacturing license. The AR argued that selling commission and discount should be excluded from AMP expenses, which the Special Bench agreed with. The matter was remitted to the AO/TPO to decide afresh in line with the LG Electronics case. The assessee will have a reasonable opportunity to be heard in the fresh proceedings.

The AR contended that selling commission and discount should be excluded from AMP expenses, which the Special Bench agreed with. The AO/TPO was directed to exclude sales-specific expenses from the total AMP expenses. The appeal was allowed for statistical purposes, and the matter was remitted to the AO/TPO for fresh determination in line with the LG Electronics case. The Stay Application became infructuous due to the decision on the appeal, and it was dismissed accordingly.

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