High Court exempts application, focuses on trade mark fees, Transfer Pricing Adjustments, AMP Expenditure

The High Court allowed the exemption application subject to all just exceptions, leading to the disposal of the applications. Regarding Transfer Pricing Adjustments, the Court focused on trade mark fee payments and the choice between TNMM and CUPM. The Court noted that while AMP Expenditure was not adjusted, the issue of trade mark fee payments needed consideration due to unresolved adjustments in previous years. The Court framed the question of law around trade mark fee payments for the current year to address the AMP Expenditure adjustments issue, leading to further proceedings and a scheduled hearing.

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Issues:
1. Exemption application
2. Transfer Pricing Adjustments - Trade mark fee and Transactional Net Margin Method (TNMM) vs. Comparable Uncontrolled Price Method (CUPM)
3. Transfer Pricing Adjustments - Advertisement, Marketing, and Promotion (AMP) Expenditure

Exemption Application:
The High Court allowed the exemption application subject to all just exceptions, leading to the disposal of the applications.

Transfer Pricing Adjustments - Trade mark fee and TNMM vs. CUPM:
The Court considered whether the Income Tax Appellate Tribunal (ITAT) erred in deleting the Transfer Pricing Adjustments related to international transactions concerning the payment of trade mark fee and in choosing to apply the Transactional Net Margin Method (TNMM) over the Comparable Uncontrolled Price Method (CUPM). The Court noted that the ITAT had directed the deletion of Transfer Pricing Adjustments for Advertisement, Marketing, and Promotion (AMP) Expenditure. While the AMP Expenditure was not adjusted, the Court found that the issue of trade mark fee payments needed consideration due to the lack of adjustments in previous years. Consequently, the Court framed the question of law around the trade mark fee payments for the year in question, as it encompassed the unresolved issue of AMP Expenditure adjustments.

Transfer Pricing Adjustments - Advertisement, Marketing, and Promotion (AMP) Expenditure:
The Court observed that the ITAT had directed the deletion of Transfer Pricing Adjustments concerning AMP Expenditure, which had not been adjusted in previous years. As a result, the Court decided that the question of law regarding the trade mark fee payments would cover the issue for the current year, as no adjustments were made for AMP Expenditure in previous years. Therefore, the Court concluded that the other questions of law did not arise, and issued notice for further proceedings, with a hearing scheduled for a specific date.

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