Block of assets depreciation and AMP benchmarking challenge failed under binding precedent and Bright Line Test reasoning.

Depreciation on the Dharuhera unit was treated as allowable under the block of assets concept, so it could not be denied merely because particular assets were discarded during the year or were no longer individually used. A separate AMP adjustment was also not warranted where the distribution business had already been benchmarked, and the court followed binding precedent that rejected an upward AMP adjustment based on the Bright Line Test. The proposed addition of 20% of reimbursement expenses for further benchmarking likewise did not survive, as the Bright Line Test approach to AMP benchmarking had already been held legally unsustainable in the assessee's own case. No substantial question of law survived for adjudication.

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Issues: (i) Whether the disallowance of depreciation on the Dharuhera unit was liable to be deleted on the ground that the relevant assets had been discarded during the year and were no longer in the assessee's ownership; (ii) Whether a separate AMP adjustment was warranted where the distribution business had already been benchmarked separately; (iii) Whether the direction to add 20% of the reimbursement of expenses and complete the benchmarking of the international transaction was sustainable when the AMP issue had been benchmarked by the TPO using the Bright Line Test.

Issue (i): Whether the disallowance of depreciation on the Dharuhera unit was liable to be deleted on the ground that the relevant assets had been discarded during the year and were no longer in the assessee's ownership.

Analysis: The claim was held to be covered by the principle that depreciation is allowable with reference to the block of assets and not on a unit-wise or asset-wise basis in the manner suggested by the Revenue. The earlier decision relied upon had applied the statutory framework to hold that, once assets fall within a block and the block remains extant, depreciation cannot be denied merely because particular items were discarded or not individually used in the relevant year.

Conclusion: The question did not arise for consideration and was answered in favour of the assessee and against the Revenue.

Issue (ii): Whether a separate AMP adjustment was warranted where the distribution business had already been benchmarked separately.

Analysis: The issue stood covered by the earlier binding decision in the assessee's own case, which held that no upward AMP adjustment was justified where the tested comparables showed a lower margin and the Bright Line Test could not sustain the transfer pricing adjustment. The court treated the question as already concluded by precedent and declined to reopen it.

Conclusion: The question did not arise for consideration and was answered against the Revenue.

Issue (iii): Whether the direction to add 20% of the reimbursement of expenses and complete the benchmarking of the international transaction was sustainable when the AMP issue had been benchmarked by the TPO using the Bright Line Test.

Analysis: This question was also held to be governed by the prior decision in the assessee's own case, where the use of the Bright Line Test for AMP benchmarking was found to be legally erroneous. Following that binding view, the court held that the proposed substantial question did not survive independently in the present appeal.

Conclusion: The question did not arise for consideration and was answered against the Revenue.

Final Conclusion: No substantial question of law survived for adjudication, and the appellate challenge to the Tribunal's order was not entertained.

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