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of <h1>Tribunal Upholds CIT(A) Decision: AMP Expenses Not International Transactions, No Transfer Pricing Adjustments Needed.</h1> <h3>ACIT Circle-27 (2), New Delhi Versus Wrigley India Pvt. Ltd.</h3> The Tribunal dismissed the Revenue's appeal, upholding the CIT(A)'s decision to delete the addition made by the AO regarding AMP expenses. It concluded ... TP Adjustment - AMP expenses incurred - characterized as an international transaction under the provision of Section 92B or not? - HELD THAT:- As in Maruti Suzuki India Ltd. [2015 (12) TMI 634 - DELHI HIGH COURT] held that the AMP expenses incurred could not be characterized as an international transaction under the provision of Section 92B of the Act and deleted the addition. Assessee appeal allowed. Issues:1. Whether AMP expenses constitute an international transaction creating marketing intangiblesRs.2. Whether the existence of an international transaction can be determined from intercompany arrangementsRs.3. Whether the IT Act provides machinery provisions to benchmark international transactions from AMP expensesRs.4. Whether the Bright Line Test (BLT) can be used to benchmark AMP transactionsRs.5. Whether the benefit to the Associated Enterprise (AE) from AMP expenditure is international or incidentalRs.6. Whether separate benchmarking of each international transaction is required under TNMMRs.Analysis:1. The appeal was filed by the Department against the CIT(A)'s order for Assessment Year 2012-13. The AO found the assessee had international transactions with its Associated Enterprises (AEs), leading to scrutiny by the Transfer Pricing Officer (TPO). The TPO determined an Arms Length Price and directed an income enhancement due to advertising and promotion expenses. The final assessment added the same amount to the income.2. The CIT(A) allowed the assessee's appeal, citing consistency with previous tribunal decisions for other assessment years. The Department challenged this decision, supported by the TPO's findings and the final assessment order. The Assessee's Representative argued for dismissal based on the CIT(A)'s reliance on past decisions and consistency.3. The Tribunal reviewed the CIT(A)'s reliance on earlier tribunal decisions for AYs 2007-08 to 2009-10, where it was held that AMP expenses are not international transactions under Section 92B of the Act. The Tribunal followed the High Court's ruling in Maruti Suzuki India Ltd. case and deleted the transfer pricing adjustment, emphasizing consistency.4. The High Court in Maruti Suzuki India Ltd. Vs. CIT held that AMP expenses do not qualify as international transactions under Section 92B, supporting the Tribunal's decision. Based on consistency and precedent, the Tribunal dismissed the Revenue's appeal, finding no merit in challenging the CIT(A)'s deletion of the addition.5. The Tribunal's decision was based on the principle of consistency with past rulings and the interpretation of international transactions involving AMP expenses. The appeal was dismissed, upholding the CIT(A)'s deletion of the addition made by the AO, emphasizing the non-international nature of AMP expenses.This detailed analysis highlights the key legal and factual aspects of the judgment, focusing on the interpretation of international transactions related to AMP expenses and the application of transfer pricing principles under the IT Act.
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