TaxTMI 
TaxTMI 
2014 (4) TMI 112
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....ectionary products at various factories in Tamil Nadu, Haryana and Uttarakhand of various brands including Big Babool, Alpenlibe, Center Fresh, Center Fruit, Center Shok, Chater Patar, Chlor-mint, Choco-tella, Cofitos, Happydent White, Protex Happydent, Marbels, Mentos, etc. 3. The Transfer Pricing Officer (TPO) found Advertisement, Marketing and Promotion (AMP) expenses of Rs.113.35 crores as excessive and it was also held that these excessive expenses have been incurred to promote the brand/trademarks of the assessee's Associate Enterprises (AEs) without charging any compensation for rendering the brand/trademarks promotion service. In the AMP spend comparison, the TPO considered 13 companies which were selected by the assessee for compa....
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.... confirming that alleged excessive AMP expense incurred by the licensee ('the Appellant') of a brand was an international transaction between the licensee and the licensor ('associated enterprise' /' AE'). 1.1.1 On the facts and in law, the Ld. TPO, the Ld. AO and the Hon'ble DRP erred in not appreciating that Indian Transfer Pricing Regulations have no provisions to hold that alleged excessive AMP expense incurred by the licensee of a brand results in provision of service by licensee to the licensor. 1.1.2 On the facts and in law, the Ld. TPO, the Ld. AO and the Hon'ble DRP erred in not appreciating that Indian Transfer Pricing Regulations have no provisions to hold that alleged excessive....
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....tirely reaped/borne by the Appellant and any benefit to tile AE may at best is incidental in nature. 1.5 On the facts and in law, the Ld. TPO and the Ld. AO erred in erroneously including, and the Hon'ble DRP erred in confirming the action of the Ld.TPO and Ld.AO in treating distribution expenses as a part AMP expenses for computing the impugned addition on account of AMP expenses. 1.6 Without prejudice to the above grounds, on the facts and in law, the Ld. TPO and the Ld. AO erred in proposing, and the Hon'ble ORP erred in selecting inappropriate comparables without appreciating the fact that none of the comparable companies selected by the Ld. TPO was a licensee of brand and comparable i....
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.... no legal or commercial basis of adoption of arithmetic mean. The ld. AR also pleaded that if advertisement expenses are considered as a separate service and not a part of manufacturing operations of the assessee then its margins for the year would increase from 4.64% on sales to 22.01% and lead to unrealistic margin and absurdity. Ld. AR also submitted that the comparables as selected by TPO have become inappropriate in view of criteria laid down by the Special Bench. Ld. AR also pleaded that expenses incurred in connection with the sales needs to be removed from the purview of AMP expenses in view of the rulings in the cases of LG Electronics India Pvt Ltd. vs. ACIT - ITA No.5140/Del/2011 reported in (2013) 140 ITD 41 (Del.)(SB), M/s. Gla....