TaxTMI 
TaxTMI 
2019 (6) TMI 471
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....rtain additions, disallowances & TP adjustments as against returned income of Rs. 190.29 Lacs e-filed by the assessee on 28/11/2011. 3. The Ld. Authorised Representative for the assessee [AR], Shri M.P.Lohia, at the outset, submitted that all the issues under appeal are covered by the earlier orders of the Tribunal in assessee's own case which is evident from the fact that early hearing was granted to the assessee vide order sheet entry dated 27/07/2018. The said facts were confronted to Ld. CIT-DR who could not rebut the same. The details for Tribunal's order, for ease of reference, could be tabulated in the following manner: - No. ITA No. Order Dated AYs 1. ITA Nos.6005,6006,5807/Del/2013 31/03/2017 2007-08 & 2008-09 2. ITA Nos. 1855, 979/Del/2014 16/06/2017 2009-10 3. ITA Nos. 1784,1857/Del/2016 13/04/2018 2011-12 In the above background, our ground wise adjudication is as follows. 4.1 Ground No.1 is general in nature. Ground No.1.1 and 1.2 read as under: - Part I-Corporate Tax Adjustments On the facts and in the circumstances of the case and in law the learned AO on fact and in law has: Disallowanc....
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.... consistent view of Tribunal, we delete the impugned additions of Rs. 8.15 Crores. The Ld. AO is directed to recompute the same in terms of our above directions. The grounds of appeal stand allowed. 5.1 The next Ground reads as under: - "Disallowance of 50% of advertisement and sales promotion expenses amounting to Rs. 9,08,930/- 1.3 erred in disallowing 1/2 of the advertisement and sales promotion expenses incurred for the purpose of business amounting to Rs. 9,08,930/- by holding that such expense are enduring in nature and in nature of deferred revenue expenditure; and 1.4 Without prejudice to the above, erred in not allowing amount disallowed in the earlier year." On perusal of Profit & Loss Account, it transpired that assessee debited advertisement and sales promotion expenditure for Rs. 18.17 Lacs. The Ld. opined that the same were incurred to enhance the profitability. Therefore, 50% of this expenditure i.e. Rs. 9.08 Lacs was deferred to subsequent year. The Ld. DRP, following directions in AYs 2008-09 to 2011-12, upheld the same. 5.2 We find that this issue is covered by the cited order of Tribunal for AYs 2007-08 & 2008-09, wherein th....
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.... of the Tribunal, we delete the impugned additions of Rs. 9.08 Lacs. Ground No. 1.3 stands allowed whereas ground no. 1.4 becomes infructuous. 6.1 The next issue that fall for our consideration is as under: - Disallowance of 4/5th of the recruitment and training expenses amounting to Rs. 44,76,295 "1.5 erred in disallowing 4/5lh of the recruitment and training expenditure amounting to Rs. 44,76,295 by holding that such expenditure are enduring in nature and in the nature of deferred revenue expenditure to be amortized over a period of 5 years." The assessee incurred an expenditure of Rs. 55.95 Lacs towards staff recruitment and training. The Ld. AO treating the same as enduring benefit, allowed only 1/5th of the same and disallowed the balance expenditure to be appropriated in the next 4 years. The Ld. DRP, following directions in AYs 2008-09 to 2011-12, upheld the same. 6.2 We find that this issue is covered by the order of Tribunal for AY 2008- 09, wherein the matter has been concluded in the following manner: - 16.2 The Ld. CIT-A has clearly held that no asset was created by incurring expenditure on recruitment and training and, therefore, the....
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....xpenditure was nothing but indirect way of according benefits / incentives to the directors and therefore, partakes the character of commission income. Since no TDS was deducted against the same, it was to be disallowed u/s 40(a)(ia). The Ld. DRP, following directions in AYs 2008-09 to 2011-12, upheld the same. 7.2 The perusal of details of these expenditures, as tabulated on page no. 107 of the paper-book, would reveal that these expenditures have been incurred towards convention expenses, education support expenses, seminar sponsorship fees, symposium/ workshop expenses. We find that this issue, on similar factual matrix is covered by the order of the Tribunal for AY 2011-12. The Tribunal has concluded the matter in assessee's favor by following the judgment of this Tribunal rendered in India Medtronics Pvt. Ltd. [ITA 1600/Mum/2015 dated 17/10/2018]. The Ld. AR has further drawn our attention to the fact that similar factual matrix is also covered by the subsequent decision of Hon'ble Rajasthan High Court rendered in Dr. Anil Gupta [ITA No.286 of 2018], Mumbai Tribunal in Aristo Pharmaceuticals Pvt. Ltd. [ITA No. 5553 &6129 of 2014 26/07/2018] & Pune Tribunal in Emcure Pharmac....
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....ing, Marketing, Sales Promotion Expenses [AMP] as international transaction. However, Ld. TPO noted that the assessee was a distributor of products manufactured by the assessee's AE and the products bear the brand / trademark of the AEs. Therefore, by incurring these expenditures, the assessee, in the opinion of Ld. TPO, has developed marketing intangibles in the form of distribution and dealer network, network with hospitals, customer bases etc. Therefore, the assessee was required to be compensated suitably for the same. The expenses incurred by the assessee under this head amounted to Rs. 14.86 Crores which worked out to be 10.62 % of gross sales. In the above background, Ld. TPO proceeded to determine the ALP of the same. 9.3 The assessee agitated the same by submitting that the AMP expenses were paid to third parties in India and there was no arrangement / agreement, whatsoever, between the assessee and its AE for undertaking any brand building activity and therefore, mere incurring of aforesaid expenditures would not constitute international transaction. These expenses were stated to have been incurred by the assessee for its own benefit and it was submitted that no servic....
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....allowance of conference expenses 496.44 Lacs Facts being pari-materia the same, our findings, observation, conclusion as for AY 2012-13 shall mutatis mutandis apply to this year also. Accordingly, additions listed at serial nos. 1,2,4 & 5 stands deleted. 11.1 Facts qua addition of Rs. 10.09 Lacs listed at serial no. 3 are slightly different in this year. The Ld.AO has disallowed 50% of advertisement and sales promotion expenses of Rs. 28.62 Lacs as claimed by the assessee in the Profit & Loss Account and proposed addition of Rs. 14.31 Lacs. The Ld. DRP, at para 8.1, perused the nature of expenditure and deleted the additions except addition of Rs. 11.66 Lacs [wrongly referred to as Rs. 10.09 Lacs in the directions of Ld. DRP]. The said amount represent expenditure towards purchase of gift card of Reliance Digital Retail Ltd. It was observed that these gift cars were actually cash which permits the recipient to buy his own choice of goods from Reliance Digital Stores as per own convenience. These cards were redeemable at all Reliance Digital Stores. The minimum value of the card was stated to be Rs. 500/- whereas the maximum value could be much more. The Ld. DRP stated t....