AI Drafter 
TaxTMI 
TaxTMI 
2018 (2) TMI 1851
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....e and the products manufactured by the assessee are also manufactured by the AE and its other subsidiaries in different countries with the same name? (2) Whether the Tribunal was legally justified in holding that Advertisement, Marketing and Promotion (AMP) expenditure was not an international transaction u/s.92B even though the assessee was performing Development, Enhancement, Maintenance, Protection and Exploitation (DEMPE) functions for its AE and doing activity of brand building? (3) Whether the Tribunal was legally justified in holding the ground of the revenue as infructous, that the selling expenses should be excluded from the AMP expenditure as well as to use the gross profit rate in the distribution segment as the mark-up on the AMP expenditure? (4) Whether the Tribunal was legally justified in deleting the addition of Rs. 8,92,06,347/- made on account of Arm's Length service fee payment to its Aes specifically when the assessee failed to submit cost benefit analysis for payment of services, proof for requisition of services, proof of availing services and comparison about the cost of services if these services were purchased in India itself?....
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....roup Services of Rs. 8,92,06,347/- (iii) Purchase of fixed assets of Rs. 51,33,22,090/-. 4. We have heard counsel for the appellant. 5. Since in the case of same assessee, we have already decided the matter with regard to issue no.1 to 5 in D.B. ITA No.39/2017 (Pr. Commissioner of Income Tax, Alwar vs. M/s. Gillette India Ltd.) decided on 18.7.2017 wherein it has been held as under:- "4. Counsel for the appellant has taken us to the order of the tribunal and contended that tribunal has wrongly relied upon the decision against which the SLP is pending and advertisement expenses which are incurred are disproportionate to the turnover or income. 4.1 In that view of the matter, the tribunal has committed serious error in reversing the finding of AO as well as CIT(A). 4.2 Counsel for the appellant has taken us to the details of the judgment of tribunal and further contended that the issue regarding the chargeable interest and adjustment of Rs. 80,95,948/- made on account of Arm's Length Interest, the tribunal has wrongly charged the same. 5. Counsel for the respondent has contended that question no.6 of appeal no.40/2017 which is questi....
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.... international transaction in light of amendment to explanation to section 92B of the Act. Aggrieved by the DRP's directions, the Appellant has approached the present Bench." 6.5 And conclusion which has been reached in para no.6.13 & 6.14 by the tribunal reads as under:- "6.13 After insertion of explanation 1(c) to section 92B of the Act, the payment of deferred payment or receivable or any debt arising during the course ofbusiness shall fall under the definition of international transaction. However, at the same time, these transactions of allowing credit period to AE of realization of sale proceeds is not an independent international transaction but is closely linked or a continuous transaction alongwith sale transactions to the AE. The same is also in consonance with rule 10A(d) as well as the concept of aggregation of closely linked transaction supported by the OECD transfer pricing guidelines. In the instant case, no adjustment has been made by the TPO in respect of sale transactions with the AEs and the ALP has been accepted. In light of that, there cannot be any adjustment in respect of the credit period extended to the AE. Even if one wa....
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....xpenditure incurred by the assessee could not be treated and categorized as an international transaction u/s 92B of the Act and thereby, the adjustment on account of AMP expenditure is hereby deleted and ground of the assessee's appeal is allowed. 7. Regarding issue no.6 which is issue no.2 of Tax Appeal No.125/2016 (Principal Commissioner Income Tax, Alwar vs. M/s. Gillette India Ltd.) decided on 23.5.2017 wherein with regard to issue no.2, it has been observed as under:- "5. Regarding issue No.(ii) & (iii), the same are covered by the decision on issue No.(iv) & (v) of appeal No.134/2014, wherein the following reasoning was adopted. "6. Regarding issue No.(iv) & (v) counsel has relied upon the decision of the Supreme Court in the case of Commissioner of Income Tax. vs. Alfa Laval (India) Ltd. [2007] 295 ITR 0451 and the decision of Bombay High Court in the case of Commissioner of Income Tax vs. Retilal Becharlal & Sons and Commissioner of Income Tax vs. General Atlantic (P) Ltd. [2016] 384 ITR 0271 (Bom). 6.1 Counsel for the appellant has contended that the expenses made were not admissible under Section 37 of the Act, where the income was disproport....