TaxTMI 
TaxTMI 
2022 (7) TMI 1605
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....2 respectfully craves leave to prefer an appeal under section 253(1 )(d) of the Income-tax Act, 1961 (hereinafter referred to as 'Act'), against the order dated 25th November 2021 (hereinafter referred to as impugned order) passed by the Additional/Joint/Deputy/Assistant Commissioner of Income Tax/Income Tax Officer, National eAssessment Centre (hereinafter referred to as the learned 'AO') under section 143(3) read with section 144C of the Act in pursuance of the directions dated 22th September, 2021 issued by the Hon'ble Dispute Resolution Panel (hereinafter referred to as 'Hon'ble DRP'). In the facts and circumstances of the case and in law, the learned AO/ Transfer Pricing Officer ('TPO') and the Hon'ble DRP have: 1. erred in law and on facts, by making addition of INR 26,83,14,336/- to the total income of the appellant. 2. Erred in adding the adjustment made on protective basis on account of Advertising, Marketing & Promotion ('AMP'P expenses to the total income of the Appellant and computed the tax demand. Grounds in relation to treatment of AMP as an international transaction: 3. erred in holding the AMP expenditure incurred by the....
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....t. Ltd and subsequently followed in case of Maruti Suzuki India Ltd., which rejected the application of BLT. 11. erred in not following the judicial discipline of following the directions of Hon'ble ITAT in Appellant's own case for AY 2014-15 rejecting the application of BLT. 12. erred in not providing set-off against appellant's distribution margins while using the de-bundled approach to benchmark AMP expenditure, as directed by the Hon'ble High Court in the case of Sony Ericsson Mobile Communications India Pvt. Ltd. 13. Erred in levying a further mark-up of service providers on AMP expenses for determination of the arm's length price of the alleged brand promotion services rendered by the appellant to its AEs. 14. erred in making inappropriate selection of comparable companies for the mark-up on alleged AMP expenditure while computing adjustment. Grounds in relation to Substantive adjustment using Residual Profit Split Method approach 15. erred on facts and circumstances of the case and in law in holding Residual Profit Split Method ('RPSM') as the most appropriate method ('MAM') for benchmarking AMP spend. 16. erred ....
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....nto by the assessee Company. On 25/01/2021, DCIT, IT & TP-1(2)(1), New Delhi has passed an order u/s 92CA (3) of the Act, wherein the Ld. TPO proposed an addition of Rs. 9,57,45,429/- on substantive basis and Rs. 21,14,36,641/- on protective basis which was proposed to be added back to the total income of the assessee. However, demand for protective adjustment of Rs. 21,14,36,641/- was not enforced and put on hold since the judgment of Hon'ble Supreme Court was awaited over the concerned issue. The assessee has objected for the proposed variations in the income returned before the DRP. The DRP vide order dated 22/09/2021 gave a direction to the A.O to incorporate the findings of the panel in respect of various objections suitable in the final order. Consequently, giving effect order passed on 28/10/2021, further final assessment order came to be passed on 25/11/2021 u/s 143(3), Section 144C (13) read with Section 144B of the Act. 5. Aggrieved by the final assessment order, the present appeal has been preferred by the assessee on the grounds mentioned above. 6. The Assessee's Grounds No. 1 & 2 are general in nature. Ground No. 3 to 7 in respect of treating of AMP as intern....
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....ide order dated 18/05/2020 in ITA No. 9312/Del/2019 held as under:- "13. We have heard the ld. Authorized Representatives of the parties to the appeal, gone through the documents relied upon and orders passed by the revenue authorities below in the light of the facts and circumstances of the case. 14. Now, it is brought to our notice by the ld. AR for the taxpayer that protective adjustment using bright line approach on account of AMP expenses by the Revenue has been held to be not sustainable by the coordinate Bench of the Tribunal in taxpayer's own case in ITA No.8060/Del/2018 for AY 2014-15 vide order dated 24.01.2019. 15. Undisputedly, this is a case of AMP adjustment in case of pure distributor. It is also not in dispute that in case of the taxpayer, AMP adjustment has been a legacy issue and the ld. DRP decided the same on the basis of earlier year order by taking defence that Revenue has already filed the Special Leave Petition before the Hon'ble Supreme Court. It is also not in dispute that the ld. DRP mentioned in para 3 of its order that during AY 2014-15, the matter as to whether routine AMP spent is an "international transaction" ....
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....e instant case, there is not an iota of material on the file apart from applying the BLT and by taking the view that the taxpayer has incurred huge AMP/sales expenses to the tune of 6.42%, no cogent material is there to treat the incurring of AMP expenses as international transaction more particularly when basis for treating the AMP expenses as international transaction i.e. BLT is not a legally sustainable method. 21. Undisputedly, there is no change in the FAR of the taxpayer company since AY 2010-11 and the taxpayer is performing same functions. In AY 2010-11, the coordinate Bench of the Tribunal vide order dated 22.04.2019 passed in ITA No.1764/Del/2015, available at page 484 of the paper book, held that the Revenue has failed to prove that AMP expenditure by the taxpayer is a separate international transaction by returning following findings :- "29. The entire finding and approach of the TPO and DRP has been purely based on hypothesis and one of the agreement entered in the earlier year for a limited period of six months and this has been stated to be a material so as to determine that there was an international transaction qua AMP expenditure in this year. S....