TaxTMI 
TaxTMI 
2019 (1) TMI 1651
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....come of Rs. 66,47,37,700/-. The Assessing Officer made a reference u/s 92CA(1) of the IT Act to determine the arm's length price of the international transactions entered into by the assessee with its AEs during the F.Y. 2013-14. The TPO, during the course of TP assessment proceedings observed that the assessee has entered into the following international transactions during the year:- No. Nature of Transaction Value (INR) Method applied 1. Purchase of goods, promotional and other supplies 6,571,207,639 RPM 2 Purchase of Fixed Assets 7,049,548 TNMM 3 Service Income 30,717,853 TNMM 4 Warranty Reimbursements received 69,937,244 CUP 5. Cost Reimbursements received 2,619,750 CUP 6 Cost Reimbursements Paid 5,628,706 CUP 4. He issued a detailed show cause notice asking the assessee to file the various details as called for by him. After considering the various replies submitted by the assessee from time to time the TPO proposed an upward adjustment of Rs. 62,47,42,783/- u/s 92CA(3) of the IT Act on protective basis. While doing so, he observed that an amount of Rs. 41,71,29,703/- was spent by the....
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....f an international transaction between two Associated Enterprises ("AE") under section 92B of the Act, was not satisfied or existed as there was no agreement, understanding or arrangement between the Appellant and the AE for incurrence of such expenditure by the Appellant and the Dispute Resolution Panel ("DRP") erred in upholding the same. 2.1. That on the facts and circumstances of the case and in law, the AO / DRP / TPO have erred in re-characterizing the Appellant as service provider rendering brand building services to its AE, without appreciating that it is a full risk bearing distributor incurring AMP expenditure in the course of its own business to promote its sales in India. 3. That on the facts and circumstances of the case and in law, the orders passed by the AO / DRP / TPO were bad in law as the unilateral AMP expenditure incurred by the Appellant was categorized as 'international transaction' under chapter X of the Act, by the AO / DRP / TPO, contrary to law in as much the AO neither granted any opportunity of being heard to the Appellant, nor passed a speaking order recording his satisfaction in relation to characterisation / categorization of the AM....
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....puting mark-up for the alleged international transaction and without providing an opportunity of being heard in this regard. 7.2 Notwithstanding and without prejudice that no mark-up could have been levied, on the facts and circumstances of the case and in law, the AO / TPO have erred in selection of improper comparable companies for application of mark-up, being entities providing market support functions and without sharing a search process for identifying the comparable companies. Further, the DRP erred in upholding the erroneous approach of AO/TPO. 8. That on the facts and circumstances of the case and in law, the AO / DRP / TPO have erred in not granting set-off of excess profit from distribution of products while benchmarking the alleged international transaction of incurrence of excessive AMP expenditure. 9. That on the facts and circumstances of the case and in law, the AO / DRP / TPO have erred in not granting quantitative / economic adjustments (such as non-payment of royalty / expenses incurred on new product launches) while quantifying arm's length price of the alleged international transaction of AMP expenditure. 10. That on the fact....
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....e in favour of the assessee. The relevant observations of the Tribunal from para 15 onwards reads as under:- "15. TPO by applying the Bright Line Test (BLT) proposed adjustment of Rs. 22,30,18,964/- on protective basis . The ld. AR for the assessee by relying upon the decisions rendered by the coordinate Bench of the Tribunal in Tianjin Tianshi Biologicial Development Company Ltd. vs. DCIT - (2014) 52 TAXMANN.COM 518 (Delhi-Trib, ITO vs. M/s. Fussy Financial Services Pvt. Ltd. in ITA No.4227/Del/2014 dated 05 .06.2017, Perfetti Van Melle India Pvt. Ltd. vs. DCIT in ITA No.1073/Del/2017 dated 24.05.2017, decision rendered by Hon'ble Delhi High Court in Sony Ericsson Mobile Communications India (P.) Ltd. vs. CIT-III - (2015) 55 taxmann.com 240 (Delhi) and decision rendered by Hon'ble Gujarat High Court in Veer Gems vs. ACIT - (2011) 15 taxmann.com 355 (Gujarat) contended that TP adjustment on protective basis is not sustainable and order is itself void ab initio . The ld. AR for the assessee further contended that BLT could have been applied at the first stage. 16. The coordinate Bench of the Tribunal in case cited as Perfetti Van Melle India Pvt. Ltd. vs. DCIT in I....
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....unal in Perfetti Van Melle India Pvt. Ltd. (supra), TP adjustment amounting to Rs. 22,30,18,964/- by applying BLT is not sustainable on protective basis having no statutory mandate. So, ground no.5 is determined in favour of the assessee. 10. We find following the above decision, the Tribunal in assessee's own case vide ITA No.6299/Del/2017, order dated 06.11.2017, for assessment year 2013-14 has, again, allowed the appeal filed by the assessee by directing the Assessing Officer to delete the addition made on account of AMP adjustment on protective basis by applying the BLT. Since the Tribunal in assessee's own case has already decided the issue and directed the Assessing Officer/TPO to delete the addition made by them by applying brightline test, therefore, in absence of any contrary material brought to our notice, we set aside the order of the Assessing Officer and direct him to delete the addition. 11. So far as ground of appeal No.8 and 9 are concerned, the ld. counsel for the assessee submitted that these grounds are academic in nature and does not require any adjudication. 12. In view of the above submission of the ld. counsel for the assessee and in absence of any o....
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....see shall not be recovering the said Customs Duty paid from its customers, therefore, the assessee is claiming this deduction in respect of the amount of duty paid under protest u/s 43B(a). Referring to section 43B, he submitted that as per the said provision 'any expenditure, inter alia, in the nature of tax, duty, cess, etc., imposed by any law otherwise allowable under the other provisions of the Act, would be allowed as a deduction only in the year in which this sum is actually paid, irrespective of the year in which the liability to pay such sum was incurred.' Therefore, the assessee is eligible for deduction in respect of Customs Duty amounting to Rs. 10,06,87,203/- paid under protest during F.Y. 2013-14. The ld. counsel for the assessee also filed an application requesting admission of certain additional evidences, the details of which are as under:- Sr. No. Particulars 1 Copy of intimation dated March 14, 2014 by Commissioner of Customs (Import & General), denying exemption to the Appellant from payment of Basic Customs Duty under Notification No. 25/2005-Cus dated March 1, 2005. 2 Copy of letters filed with Customs Authority intimating payment of duty ....
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....tion either in the return of income filed or in the computation statement. The assessee is also denying its liability and the matter is pending before the Supreme Court. Further, when the liability has not accrued to the assessee due to the dispute raised by the assessee, therefore, the claim of the assessee at this stage cannot be entertained. Further, the assessee is making a fresh claim by filing fresh evidences, therefore, this claim should not be entertained at all. 18. The ld. counsel for the assessee in his rejoinder submitted that the assessee was exempt from Customs Duty till the preceding year. However, only during this year the Customs Authorities have levied the duty and forced the assessee for deposit of the amount for which the assessee has made deposit under protest to clear the goods. If the claim is not admitted during this year, then, the assessee will be deprived of this claim for ever. 19. We have considered the rival arguments made by both the sides and perused the material available on record. It is an admitted fact that the assessee has not claimed the amount of Rs. 10,06,87,203/- as deduction being Customs Duty paid under protest either in the return o....
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....en the return was filed or when the assessment order was made or if the ground became available on account of change of circumstances or law. There may be several factors justifying the raising of such a new plea in an appeal. Each case has to be considered on its own facts. If the Appellate Assistant Commissioner is satisfied, he would be action within his jurisdiction in considering the question so raised in all its aspects. He must be satisfied that the ground raised was bona fide and that the same could not have been raised earlier for good reasons. The Supreme Court said that it was not overruling the decision in Gurjargravures P. Ltd. [1978] 111 ITR 1, since it could be distinguished on facts. 38. The ratio of this judgment would apply to the jurisdiction of the Appellate Tribunal also. The observations of the Supreme Court, in fact, cover all appellate authorities under the Income-tax Act. We do not find anything in section 254(1) of the Income-tax Act which limits the jurisdiction of the Appellate Tribunal in any manner. For reasons which we have set out earlier, the phrase "pass such order thereon" does not in any way restrict the jurisdiction of the Tribunal but,....