TaxTMI 
TaxTMI 
2020 (5) TMI 484
X X X X Extracts X X X X
X X X X Extracts X X X X
....d ITA No.1607/Del/2018 as the lead case. Facts of the case, in brief, are that the assessee is a company engaged in the business of manufacture and trading of Indian made foreign liquor (IMFL). It filed its return of income on 29.11.2012 declaring the total income of Rs. 872,20,37,142/-. This return was revised on 12th February, 2014 declaring the total income of Rs. 857,14,19,260/-. Since the assessee had entered into certain international transactions, the AO made a reference u/s 92CA(1) to the TPO for determination of the ALP of the international transaction entered into by the assessee. The TPO, during the course of TP assessment proceedings observed that the assesseee has entered into the following international transactions:- S.No. Description of the transaction Amount (Rs.) 1. Purchase of raw material 1,25,60,30,478 2. Purchase of finished goods 34,25,70,563 3. Provision of marketing support services 2,59,13,808 4. Sale of finished goods 12,10,661 5. Purchased of fixed assets 58,49,199 6. Business Performance Guarantee 31,76,79,386 7. Recovery of expenses 53,89,99,662 8. Cost recharge from group co....
X X X X Extracts X X X X
X X X X Extracts X X X X
....a margin of 12.06% 697410458.3 AMP Compensation worked out as Actual in the segment 511886580.4 Proposed adjustment u/s 92CA 1855,23,878 5% of International Transaction 255,94,329 6. Thus, an upward adjustment of Rs. 18,55,23,878/- is worked out in relation to the AMP expense. It is noted that the assessee has received an overall business performance guarantee sum of Rs. 31,76,79,386/-. Your AMP expense as a percentage of total operating expense works out to 42%. Thus, 42% of this BPG amount is taken as compensation that you have already received in this regard for carrying out the AMP function. This works out to Rs. 13,51,90,865/-. After granting such set-off, the balance amount of Rs. 5,03,33,013/- is proposed as upward adjustment in your case in relation to the AMP function performed by you for promoting the brands owned by your AE. Accordingly, the Assessing Officer may proceed to make an upward adjustment of Rs. 5,03,33,013/- in relation to the AMP expense in the Distribution segment of the assessee." 4. Similarly, the TPO in the manufacturing segment proposed an adjustment of Rs. 57,83,00,000//-, the details of which are as under:- "T....
X X X X Extracts X X X X
X X X X Extracts X X X X
....relation to brands having sales outside India is Rs. 115.65 crores. 50% of the same works out to Rs. 57.83 crores." 5. The AO, in the order passed u/s 143(3) r.w. section 143C(13) of the Act dated 26th February, 2016, made the above proposed addition. The assessee did not object to such order of the AO before the DRP, but, submitted that it will file appeal before the CIT(A) after final assessment order. The AO, in the final assessment order accordingly made T.P. addition of Rs. 62,86,33,013/- which includes Rs. 5,03,33,013 in the distribution segment and Rs. 57,83,00,000/- in the manufacturing segment. 6. The AO, in the final assessment order also made addition of Rs. 6,32,58,960/- on account of provision for transit breakage, Rs. 50,38,72,290/- on account of brand expenses and Rs. 63,24,54,323/- u/s 40a(ia) for non-deduction of tax from reimbursement of trade scheme to promoters. Thus, the AO determined the total income of the assessee at Rs. 1039,96,37,846/-. 7. In appeal, the ld.CIT(A) held that the AMP expenditure is not an international transaction in the absence of sufficient evidence towards understanding, arrangement or action in concert in the case of manufacturi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e for distribution segment exactly in line with the adjustment carried out for AY 2013-14 and 2014-15 which included steps a) to identify the excess intensity of AMP expenditure incurred by the appellant vis-a- vis the comparables b) to increase the expenditure incurred by the comparables in order to equalize the intensities c) the average profit margins returned by entities providing market support functions as identified above to be used for mark-up on the enhanced cost base of the comparables. 5.78 The copy of the remand report of the AO was received on 22/12/2017 and the same was served on the assessee on the same date. The TPO, further, submitted the details in this regard vide letter dated 27.12.2017. Further, the appellant also submitted details of AMP intensity adjustment vide email dated 22/12/2017. The AMP adjustment as worked out by the AO is as under:- Adjustment for Distribution Segment (Amount (in Rs.) Operating revenue of the Taxpayer 1,20,28,82,740 Operating cost of the Taxpayer 1,14,47,65,561 Operating Profit 5,81,17,179 Arm's Length OP/ OR 4.83% Arm's Length profit 5,80,99,236 Diff. between the ALP and rep....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ate that the direction to carry out AMP intensity adjustment, given by the jurisdictional High Court in their recent decisions, was on basis of the admitted fact regarding existence of international transaction and hence, not applicable to the facts of the instant case. 2.2. That the Ld. CIT(A) failed to appreciate that when the "Manufacturing Segment" of the Appellant had already been benchmarked using Transactional Net Margin Method ('TNMM') and the operating margins of the Appellant were found be at arms length with that of the comparable companies, there was no requirement to separately apply AMP intensity adjustment, in order to factor in the difference between the AMP functions performed by the Appellant and the comparable companies. 2.3 That the Ld. CIT(A), in the garb of AMP Intensity Adjustment, have compared the AMP functions of tested party, i.e., Appellant and comparable entities by using Brightline, i.e., AMP / Sales. 2.4. That the Ld. CIT(A) has erred in including the selling and distribution expenses while computing the AMP spend of the Appellant in complete disregard of the ratio laid down by the Hon'ble jurisdictional High Court in the ca....
X X X X Extracts X X X X
X X X X Extracts X X X X
....transactions between the Appellant and the Retailers was on a principal to principal basis and hence, any payment made as trade incentive could not be characterised as "commission" and subjected to TDS under section 194H of the Act. 4.2. That the Ld. AO / CIT(A) failed to appreciate that transaction pertaining to payment of trade scheme was between the Appellant and Retailers and the Sales Promoters merely facilitating the disbursal of such incentives. 4.3. That the Ld. AO / CIT(A) has failed to appreciate that the reimbursement of trade scheme to promoters was in the nature of incentives and discounts to retailers and did not contain any element of commission and hence was not subject to TDS under section 194H of the Act. 4.4. That the Ld. AO/ CIT(A) has disregarded that the impugned amount was purely in the nature of cost-to-cost reimbursement and does not contain any element of commission/income and hence is not subject to TDS under section 194H of the Act. 4.5. That the Ld. AO/CIT(A) failed to appreciate that these trade schemes / incentives are given to Retailers to promote/boost sales of its products as the State Trading Corporations levies....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nefit on account of advertisement expenses incurred by treating it as revenue expenditure. 5. That the grounds of appeal are without prejudice to each other. 6. That the appellant craves leave to add, amend, alter or forgo any grounds!s) of appeal either before or at the time hearing of the appeal." 12.1. The assessee has also raised the following additional grounds:- Additional Grounds raised by the assessee (A.Y.2012-13) "Ground 2.5: That the Ld. CIT(A) grossly erred in applying a distorted version of bright line test ("BLT") under the guise of AMP instensity approach to benchmark the international transaction of import of raw material which was not even disputed by the Ld. TPO in the first instance. Ground 2.6: That without prejudice to other grounds, the Ld. CIT(A) grossly erred in allowing the inclusion of M/s. Som Distilleries Limtied based on Ld. TPO's order in Appellant's own case for subsequent year, without appreciation that the said comparable would fail the functions, assets and risks ("FAR") test as prescribed under Rule 10B(2) of the Income-tax Rules, 1962 ("Rules") when compared with the Appellant, vis-à-vis manu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....urisdictional High Court in their recent decisions, was on basis of the admitted fact regarding existence of international transaction and hence, not applicable to the facts of the instant case. 2.2 That the Ld. CIT(A) failed to appreciate that when the "Manufacturing Segment" of the Appellant had already been benchmarked using Transactional Net Margin Method ('TNMM') and the operating margins of the Appellant were found be at arms length with that of the comparable companies, there was no requirement to separately apply AMP intensity adjustment, in order to factor in the difference between the AMP functions performed by the Appellant and the comparable companies. 2.3 That the Ld. CIT(A), in the garb of AMP Intensity Adjustment, have compared the AMP functions of tested party, i.e., Appellant and comparable entities by using Brightline, i.e., AMP / Sales. 2.4 That the Td. CIT(A) erred in including the selling and distribution expenses while computing the AMP spend of the Appellant in complete disregard of the ratio laid down by the hon'ble jurisdictional High Court in the case of Sony Ericsson Mobile Communications India Pvt. Ltd. : vs. CIT (supra). ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n, which is contrary to the earlier approach of the Ld. TPO/Hon'ble DRP for AY 2007-08 to 2011-12. 2.14. That the Ld. TPO/ CIT(A) erred in treating "provisions no longer required written back" as non-operating item disregarding the fact that such provisions when created were pertaining to the routine operations / normal course of business and thereby ought to be considered as operating in nature. 2.15. That the Ld. TPO/ CIT(A) erred in making protective adjustment in respect of the AMP expenditure relating to the manufacturing segment while following the 'Brightline Method' which does not have any statutory mandate. Distribution Segment 3. That the Ld. TPO / C1T(A) has erred in observing / concluding that incurrence of AMP expenses in connection with the "Distribution Segment" constitutes a separate "International Transaction" under Section 92B of the Act and requires separate benchmarking. 3.1. That once the margins earned by the Appellant from its "Distribution Segment" were found to be at arm's length vis-a-vis the comparable companies, there arose no occasion for the CIT(A) to carry out any separate AMP intensity adjustment, in view ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion 40(a)(ia) of the Act. 4.1. That the Ld. AO / CIT(A) failed to appreciate that the transactions between the Appellant and the Retailers was on a principal to principal basis and hence, any payment made as trade incentive could not be characterised as "commission" and subjected to TDS under section 194H of the Act. 4.2. That the Ld. AO / CIT(A) failed to appreciate that transaction pertaining to payment of trade scheme was between the Appellant and Retailers and the Sales Promoters merely facilitating the disbursal of such incentives. 4.3. That the Ld. AO / CIT(A) has failed to appreciate that the reimbursement of trade scheme to promoters was in the nature of incentives and discounts to retailers and did not contain any element of commission and hence was not subject to TDS under section 194H of the Act. 4.4. That the Ld. AO/ CIT(A) has disregarded that the impugned amount was purely in the nature of cost-to-cost reimbursement and does not contain any element of commission/income and hence is not subject to TDS under section 194H of the Act. 4.5. That the Ld. AO/CIT(A) failed to .4,3appreciate that these trade schemes / incentives are....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e disallowance on account of brand expenses without appreciating the assessee enjoys an enduring benefit on account of advertisement expenses incurred by treating it as revenue expenditure. 5. That the grounds of appeal are without prejudice to each other. 6. That the appellant craves leave to add, amend, alter or forgo any grounds of appeal either before or at the time hearing of the appeal." Additional Grounds raised by the assessee (A.Y.2013-14) "Ground 2.16: That the Ld. CIT(A) grossly erred in applying a distorted version of bright line test ("BLT") under the guise of AMP instensity approach to benchmark the international transaction of import of raw material which was not even disputed by the Ld. TPO in the first instance. Ground 2.17: That without prejudice to other grounds, the Ld. CIT(A) grossly erred in allowing the inclusion of M/s. Som Distilleries Limtied, without appreciation that the said comparable failed the functions, assets and risks ("FAR") test as prescribed under Rule 10B(2) of the Income-tax Rules, 1962 ("Rules") when compared with the Appellant, vis-a-vis manufacturing segment of the Appellant. Ground 3.1....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ions, and hence, it could not be equated with direct subsidy received by an assessee in lieu of the AMP expenses incurred by it. 8. That the Ld. CIT(A), in the garb of AMP Intensity Adjustment, have compared the AMP functions of tested party, i.e., Appellant and comparable entities by using Brightline, i.e., AMP / Sales which is specifically struck down by the jurisdictional Delhi High Court. 9. That the Ld. TPO/ CIT(A) has erred in including the selling and distribution expenses while computing the AMP spend of the Appellant in complete disregard of the ratio laid down by the Hon'ble jurisdictional High Court in the case of Sony Ericsson Mobile Communications India Pvt. Ltd. v. CIT : (2015) 374 ITR 118. 10. That the Ld. TPO/CIT(A) erred in rejecting functionally similar comparable companies that were selected by the Appellant in its Transfer Pricing Documentation on ad-hoc and unsubstantiated basis. 11. That the CIT(A) erred in setting aside, issue of exclusion of "M/s Delhi Duty Free Services Pvt. Ltd." ("DDFS"), by directing the AO to verify whether related party transactions undertaken by DDFS were in excess of 25%, even when all material fac....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eciate that the Appellant was prevented by sufficient cause from producing the additional evidence during the course of assessment proceedings as the CIT(A) order for AY 2012-13, which alleged ambiguity and incompleteness was passed only on 28.12.2017 (received in first week of January, 2018), i.e., pursuant to completion of assessment for the captioned assessment year. 20. That the Ld. AO/ Ld. CIT(A) erred in alleging that case of the Appellant is not covered under any of the exceptions laid down in Rule 46A of the Income Tax Rules, 1962. 21. That the Ld. CIT(A) failed to appreciate that the case of the Appellant was clearly covered under clause (c) to Rule 46A(1) as the Appellant was prevented by sufficient cause to produce the additional evidence before the AO, which was relevant and indispensable for adjudication of the issue pertaining to disallowance of trade scheme. 22. That the Ld. AO/ Ld. CIT(A) failed to appreciate that the amounts of commission paid to sales promoters and disbursement of trade schemes to retailers through sales promoter had been separately charged by the Appellant in its books of accounts and TDS was duly deducted and deposited....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cial decisions and without considering the basic finding of the TPO that the AMP spend incurred by the assessee is actually developing the brand owned by the foreign AE which is benefitting the foreign AE in various direct and indirect forms. 2. Whether on the facts and in the circumstances of the case and in law the Ld. CIT(A) was legally justified in deleting the brand building expenditure when the TPO had established that the assessee had non-exclusive rights to use the trademarks within the territory in India and any marketing intangible developed could be utilized by third party manufactures licensed by the foreign AE. 3. Whether on the facts and in the circumstances of the case and in law the Ld. CIT(A) was legally justified in holding that AMP expense does not constitute an international transaction and hence it does not lead to creation of marketing intangibles. 4. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) was legally justified in deleting the disallowance on account of brand expenses without appreciating that assessee enjoys an enduring benefit on account of advertisement expenses incurred by treating it....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ts etc. were given away to customers to promote the various brands were also undertaken. The Pernod Ricard group ("PR Group"), i.e. the AEs did not assume any significant role in deciding the local branding strategies in respect of the brands licensed to India. The group only provided very broad framework/guidelines within which the PR affiliates were supposed to exercise their discretion for promoting the brand and effecting sales of the products. PRIPL was almost independent in formulating and executing local brand promotion activities in relation to products manufactured in India." 5.13 TPO held this act of brand promotion on the part of appellant company as "action in concert" with its parent entity based on transfer pricing report. Further, TPO held that the foreign AE owning the brands need to compensate the appellant for the benefit drawn out of the exercise of spending the AMP expenditure. Therefore, the TPO proposed to allocate 50% of such AMP to the foreign AE for the benefit drawn out of the AMP expenditure incurred by the appellant. 5.14 However, there is no observation that the appellant company has been obliged to incur such AMP of a certain level fo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....int out here that Hon'ble ITAT, Delhi held in the case of the assessee for AY 2005-06 that no adjustment was warranted on the facts of the present case since the brands for which the AMP expenditure as Incurred were India specific. The court observed that if the product manufactured and sold by the assessee are India specific then it cannot be said that any benefit could have accrued to the AE on account the AMP spend in India in respect of such brands. 5.18 The appellant company is using the brand logo of the foreign AE as economic owner in a commercial sense for the purpose of exploiting it for the business purpose. In the process, the foreign AE, the owner of the brand, would have also got benefitted incidentally due to Brand building as a result of appellant company's spending on AMP in India. However, there is no dispute that such AMP expenditure was very much required by the appellant company for carrying out and growth of its business in India, There is no basis in the finding of TPO that the AMP expenditure is excessive vis-a-vis the requirement of the appellant company in running the business in India. Accordingly, the allocation of 50% of such AM....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tee and purchase of finished goods. However, since using such method the value of the said transaction was found to be at arm's length, no adjustment was directed by the ld.CIT(A). 18. It is the submission of the ld. Counsel for the assessee that the use of BLT to determine the existence of international transaction has been specifically disregarded by the Hon'ble Delhi High Court in the case of Sony Ericsson Mobile Communications India Pvt. Ltd. (supra), Maruti Suzuki India Ltd. (supra) and Valvoline Cummins (P) Ltd. vs DCIT (supra) vide ITA No.158/2016 of Hon'ble Delhi High Court. It is his submission that there is no question of existence of international transaction even in the distribution segment since the onus to prove such existence has not been discharged by the Department. Furthermore, the CIT(A) has wrongly applied the existence of international transaction on account of AMP expenditure while following Sony Ericsson Mobile Communications (supra) whereas in that case, it was specifically admitted and conceded that international transaction on account of AMP expenditure actually existed. However, no such admission or concession has been made in assessee's own case he....
X X X X Extracts X X X X
X X X X Extracts X X X X
....oach is unwarranted and would amount to judicial legislation. During the course of arguments, it was accepted by the Revenue ITA Nos. 910 to 914/Del./2015 that the TPOs/Assessing Officers have universally applied bright line test to decipher and compute value of international transaction and thereafter applied Cost Plus Method or Cost Method to compute the arm's length price. The said approach is not mandated and stipulated in the Act or the Rules. The list of parameters for ascertaining the comparables for applying bright line test in paragraph 17.4 and, thereafter, the assertion in paragraph 17.6 that comparison can be only made by choosing comparable of domestic cases not using any foreign brand, is contrary to the Rules. It amounts to writing and prescribing a mandatory procedure or test which is not stipulated in the Act or the Rules. This is beyond what the statute in Chapter X postulates. Rules also do not so stipulate." 11. Respectfully following the judgment of the Hon'ble High Court of Delhi [supra], we hold that BLT has no mandate under the Act and accordingly, the same cannot be resorted to for the purpose of ascertaining if there exists an internationa....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Court is of the view that the decision in Sony Ericsson holding that there is an international transaction as a result of the AMP expenses cannot be held to have answered the issue as far as the present Assessee MSIL is concerned since finding in Sony Ericsson to the above effect is in the context of those Assessees whose cases have been disposed of by that judgment and who did not dispute the existence of an international transaction regarding AMP expenses. XXX 60. As far as clause (a) is concerned, SMC is a non-resident. It has, since 2002, a substantial share holding in MSIL and can, therefore, be construed to be a nonresident AE of MSIL. While it does have a number of 'transactions' with MSIL on the issue of licensing of IPRs, supply of raw materials, etc. the question remains whether it has any 'transaction' concerning the AMP expenditure. That brings us to clauses (b) and (c). They cannot be read disjunctively. Even if resort is had to the residuary part of clause (b) to contend that the AMP spend of MSIL is "any other transaction having a bearing" on its "profits, incomes or losses", for a 'transaction' there has to be two parties. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 14. In the light of the aforesaid finding of the Hon'ble High Court, before embarking upon a benchmarking analysis, the Revenue needs to demonstrate on the basis of tangible material or evidence that there exists an international transaction between the assessee and the AE. Needless to mention, that the existence of such a transaction cannot be a matter of inference. 15. The Hon'ble Delhi High Court in case of Whirlpool of India Ltd vs DCIT 381 ITR 154 has held that there should be some tangible evidence on record to demonstrate that there exists an international transaction in relation with incurring of AMP expenses for development of brand owned by the AE. In our considered opinion, in the absence of such demonstration, there is no question of undertaking any benchmarking of AMP expenses. The relevant findings of the Hon'ble High Court in the case of Whirlpool of India Ltd [supra] read as under: "32. Under Sections 92B to 92F, the pre-requisite for commencing the TP exercise is to show the existence of an international transaction. The next step is to determine the price of such transaction. The third step would be to determine the ALP by a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tained, it cannot be left entirely to surmises and conjectures of the TPO. XXX 47. For the aforementioned reasons, the Court is of the view that as far as the present appeals are concerned, the Revenue has been unable to demonstrate by some tangible material that there is an international transaction involving AMP expenses between WOIL and Whirlpool USA. In the absence of that first step, the question of determining the ALP of such a transaction does not arise. In any event, in the absence of a machinery provision it would be hazardous for any TPO to proceed to determine the ALP of such a transaction since BLT has been negatived by this Court as a valid method of determining the existence of an international transaction and thereafter its ALP." 19. We do not find any force in the aforesaid contentions of the ld. DR. As mentioned elsewhere, the Revenue needs to establish on the basis of some tangible material or evidence that there exists an international transaction of provisions of brand building service between the assessee and the AE. We find support from the decision of the Hon'ble Delhi High Court in the case of Honda Seil Power Products Ltd vs D....
X X X X Extracts X X X X
X X X X Extracts X X X X
....with the foreign AE. The scheme of Chapter X of the Act is not to benchmark transactions between the Indian enterprise and unrelated third parties in India, where there is no income arising to the Indian enterprise from the foreign payee or there is no payment of expense by the Indian enterprise to the associated enterprise. Conversely, transfer pricing provisions enshrined in Chapter X of the Act do not seek to benchmark transactions between two Indian enterprises. 31. The Revenue has strongly objected for the aggregated bench marking analysis for the AMP. According to the Revenue, the assessee company has not been able to demonstrate that there is any logic or rationale for aggregation or that the transactions of advertisement expenditure and the other transactions in the distribution activity are inter-dependent, the clubbing of transactions cannot be allowed. According to the Revenue, bench marking of AMP transaction is to be carried out using segregated approach and for determination of ALP of such transactions, Bright Line is used as the tool. 32. This contention of the Revenue is no more good as BLT has been discarded by the Hon'ble High Court of Delhi ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ase of the appellant and 6.63% in the case of comparables. In the light of the recisions of the Hon'ble High Court discussed elsewhere and in the of the factual matrix exhibited hereinabove, we are of the considered opinion that the impugned addition on account of AMP expenditure is uncalled for and deserves to be deleted. Ground Nos. 7 to 8.8, taken together, are allowed." 22. We find the Tribunal, following the above order, vide ITA No.910 to 914/Del/2015, order dated 10th July, 2019 has again deleted the addition on account of AMP expenditure. Since the issue stands decided in favour of the assessee by the decision of the Tribunal in assessee's own case for the preceding assessment years i.e., A.Y. 2007-08 and 2008-09, therefore, we are of the considered opinion that no addition on account of AMP expenditure is warranted. Accordingly, the grounds raised by the Revenue are dismissed. 23. Identical grounds have been raised by the Revenue for A.Y.s 2013-14 and 2014-15. Since the facts for the impugned years are identical to the facts of the case for A.Y. 2012-13, therefore, following the similar reasonings, the grounds raised by the Revenue are dismissed. 24. So far....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... made by the AO treating the same as being capital in nature. 8.1 The brief facts involved therein are that the assessee company had claimed brand expenses amounting to Rs. 38,95,50,709/- for AY 2004-05 and Rs. 46,73,42,660/- for AY 2005-06. These expenses comprised of expenditure on event management, business promotion, merchandising, printing of brochures/mailers, market research etc. to determine the consumer reaction to company's products. The AO vide order dated 28.12.2006 for AY 2004-05 and vide order dated 08.12.2008 for AY 2005-06 disallowed 10% of such expenditure as being capital in nature on the premise that the benefit of such expenditure is enduring in nature and available to the assessee over a period of time than being restricted to the relevant previous year alone in which it was incurred, thereby leading to creation of a tangible asset being goodwill, reputation and credibility. However, the Ld. CIT (A) vide order dated 29.06.2009 for AY 2004-05 and vide order dated 28.02.2011 for AY 2005-06 deleted the said disallowance while relying upon his predecessor's order in earlier years and noting that expenditure on sales and marketing was required to re....
X X X X Extracts X X X X
X X X X Extracts X X X X
.....s 2013-14 and 2014-15. Following the reasonings given in the preceding paragraphs, the grounds raised by the Revenue are dismissed. 28. Grounds of appeal No.5 and 6 being general in nature are dismissed. 29. So far as the grounds raised by the assesseee are concerned, Ground No.1 being general in nature is dismissed. Grounds of appeal No.2 to 3.7 including the additional grounds relate to the transfer pricing adjustment made on account of AMP expenses. 30. We have heard both the sides on this issue. Since the CIT(A) himself has deleted the benchmarking on account of AMP expenses in both the manufacturing and distribution segment and has not computed any adjustment under both the manufacturing and distribution segments using AMP as a function and distorted BLT, these grounds are not pressed by the ld. Counsel being academic in nature. In view of the above, grounds No.2 to 3.7 and the additional grounds filed by the assessee being academic in nature are not being adjudicated. 31. Identical grounds including the additional grounds have been raised by the assessee for A.Y.s 2013-14 and 2014-15. Since the facts for these two assessment years are identical to the facts of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssee filed certain additional evidence for the assessment years 2012-13 and 2013-14 under Rule 29 of the ITAT Rules and submitted that these additional evidences go to the root of the matter and support the contention of the assessee that the amounts of disbursements that are in question are in the nature of discount and/or reimbursement and, therefore, no deduction of tax u/s 194H is required. We further find that for A.Y. 2014-15, the additional evidences filed by the assesseee before the CIT(A) were rejected by him on the ground that despite sufficient opportunity to show cause as to why trade schemes paid to retailers via sales promoters should not be disallowed, the assessee did not avail of the opportunity. Since the Tribunal in assessee's own case has already restored the issue to the file of the AO for adjudication of the issue afresh which has been reproduced in the preceding paragraphs, therefore, we deem it proper to restore the issue to the file of AO/TPO with a direction to decide the issue afresh in the light of the directions of the Tribunal and in accordance with the law after giving due opportunity of being heard to the assesseee. We hold and direct accordingly.....