2016 (9) TMI 1453

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....vertisement / marketing & promotion (AMP) expenses and royalty payment. 2. Brand Promotion:- The assessee in its written submissions has stated as under:- The Honourable Tribunal vide its order in ITA No. 2353/Mds12012 dated 22.04.2016 has remanded the issue on brand promotion to the file of the transfer pricing officer to determine the value of developing the intangible property by adopting Bright line test for the assessment year 2008-09. The relevant portion of the order is extracted below: - "5. In the relevant assessment year also, following the decision of the Chennai Bench. of the Tribunal and the Special Bench cited supra, we hereby hold that "Bright line test" would be the best method for determining the value ....

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....o examine these aspects and decide the matter in accordance with the ratio laid down by the Tribunal. Hence, we do not find that there is a mistake in the order of the Tribunal which requires to be rectified on this issue. ii) Advertisement, Marketing & Promotion (AMP) Expenses: The assessee in its written submissions has stated as under:- The Honourable Tribunal vide its order in ITA No. 2353 /Mds/2013 dated 22.04.2016 has remanded the issue on AMP expenses to the file of the transfer pricing officer to determine the ALP on advertisement expenses by adopting Bright line test for the assessment year 2008-09. The relevant portion of the order is extracted below: "9. Following the above decision of the Tribunal, we hereby ho....

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.... the Revenue who had made elaborate finding in their respective orders that the average rate of royalty on sales prevalent during the relevant assessment year amongst the comparable companies is only 2.54%.Therefore, this ground raised by the assessee is decided against it. The Appellant wishes to bring to the notice of the Hon'ble Tribunal that during the course of hearing, the Appellant had submitted the copy of the industry average royalty rate available in Wikipedia (refer Annexure 6). The average Royalty payment in automotive sector from the study of 35 licenses is 4.7% which is higher than the appellants' average rate of royalty payment of 3.60%. The screenshot is provided below: Royalty Distribution Analysis in Indus....