Binding precedent continues to operate despite pending Supreme Court appeal absent a stay, defeating Bright Line Test interference.

Deletion of the transfer pricing adjustment relating to advertisement, marketing and promotion expenses was upheld because the issue was covered by an existing Division Bench judgment. The pendency of appeals before the Supreme Court did not suspend the operation of those judgments in the absence of a stay, so they continued to bind the Court. Relying on Kunhayammed and Shree Chamundi Mopeds, the Court treated the precedent as operative and found no basis to interfere with the deletion based on the Bright Line Test challenge.

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Issues: Whether the deletion of the transfer pricing adjustment on account of advertisement, marketing and promotion expenses by applying the Bright Line Test called for interference, where the supporting High Court decisions relied upon were under challenge before the Supreme Court but no stay had been granted.

Analysis: The appeal was stated to be covered by the existing judgment of the predecessor Division Bench. The mere filing of appeals against those judgments before the Supreme Court did not suspend their operation in the absence of any stay. The principles in Kunhayammed and Shree Chamundi Mopeds were relied upon to hold that the challenged judgments continued to bind the Court until stayed or otherwise displaced.

Conclusion: The appeal was dismissed as covered by the binding precedent and no interference was warranted.

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