2016 (1) TMI 1234

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....O R D E R 1. These two appeals, one by the Assessee and the other by the Revenue are directed against the order dated 27th February 2015 passed by the Income Tax Appellate Tribunal ('ITAT') in ITA No.554/Del/2015 for the Assessment Year ('AY') 2010-11. 2. The central issue before the Tribunal was with regard to advertisement, marketing and sales promotion ('AMP') expenses incurred by the Assessee. The issue was whether there was an was an international transaction in regard to the AMP expenses incurred by the Assessee on behalf of its foreign associated enterprise ('AE') within the meaning of Section 92B of the Income Tax Act, 1961 ('Act'). The consequential question was how the arm's length price ('ALP') of such an international transact....

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....cations India, Daikin Air-conditioning India Pvt. Ltd., Haier Appliances (India) Pvt. Ltd., Reebok India Company and Canon India Pvt. Ltd. It noted that they were engaged in the distribution and marketing of imported branded products. A significant factor noted by the Court was: "There is no dispute or lis that the assessed are AEs who had entered into controlled transactions with the foreign AEs". Secondly, the Court noted: "It is also uncontested that the controlled international transactions can be made subject matter of the transfer pricing adjustment in terms of Chapter X of the Income Tax Act, 1961." As was noted by this Court in the subsequent decision in Maruti Suzuki India Ltd. v. Commissioner of Income Tax. (2016) 282 CTR (Del)1, ....

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....en answered against the Assessee by the earlier decision of this Court in Sony Ericsson (supra) and if the Court accepts the plea of the Assessee it would amount to reviewing the earlier decision. He also drew attention to the specific finding in para 52 of the decision of Sony Ericsson (supra) that: "The contention that AMP expenses are not international transactions has to be rejected." 10. As already noticed, the earlier decision of this Court in Sony Ericsson (supra) proceeded on the basis that the Assessees whose cases were being disposed of did not dispute the existence of an international transaction involving AMP expenses. This Court is not required to opine whether such concession was rightly made or not. However, as far AY 2010-1....