Revenue Appeal Dismissed: No AMP Expenditure Additions; No Disallowance Under Sec 14A Due to Lack of Exempt Income.

The HC dismissed the Revenue's appeal under Section 260A of the Income Tax Act, affirming the ITAT's order. The ITAT had deleted additions related to AMP expenditure and disallowance under Section 14A, citing no international transaction for brand promotion and lack of exempt income, respectively. The decision aligned with prior rulings, pending the SC's judgment in a related matter.

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Issues:
1. Appeal filed by Revenue under Section 260A of the Income Tax Act, 1961 against the common impugned order and judgment.
2. Addition on account of Advertisement, Marketing and Promotion (AMP) expenditure.
3. Protective and substantive addition made on account of AMP expenditure.
4. Disallowance under Section 14A of the Act.

Issue 1:
The Revenue filed an appeal under Section 260A challenging the order of the Income Tax Appellate Tribunal (ITAT) for the Assessment Years 2012-13 and 2013-14. The ITAT had deleted the addition on account of AMP expenditure and disallowance under Section 14A of the Act.

Issue 2:
The AMP expenditure issue involved protective and substantive additions by the Transfer Pricing Officer (TPO). The TPO applied the Bright Line Test and Cost Plus Method for the AMP expenditure. The ITAT observed that there was no international transaction for brand promotion between the Assessee and its Associated Enterprise (AE), leading to the deletion of the adjustments.

Issue 3:
The ITAT's decision was influenced by previous court rulings, including the Bausch & Lomb Eyecare Pvt. Ltd. case and Maruti Suzuki vs. CIT case. The ITAT upheld the deletion of transfer pricing adjustments on AMP expenditure for previous assessment years, which was also supported by the High Court.

Issue 4:
Regarding the disallowance under Section 14A of the Act, the ITAT deleted the disallowance as no exempt income was earned by the Assessee in the relevant assessment years. This decision was in line with the judgment in Cheminvest Ltd. case, and the court found the Revenue's contentions regarding the CBDT Circular to be untenable.

In conclusion, the High Court disposed of the appeals in accordance with previous judgments related to AMP expenditure and Section 14A disallowance. The decision was made pending the outcome of the Supreme Court's judgment in a related case.

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