TaxTMI 
TaxTMI 
2026 (9) TMI 1722
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...., they were heard together. 3. Brief facts of ITA No. 1872/Del/2023 are that the assessee filed return of Rs. 68,86,25,112/- on 29.11.2014. Subsequently, return was revised on 29.03.2016 declaring loss of Rs. 68,70,98,165/-. The deemed loss of Rs. 62,06,21,450/- was shown by the assessee company u/s 115JB of the I.T.Act. The case was selected for scrutiny through CASS under Complete Scrutiny Manner. Notice u/s 143(2) of the Act was issued on 31.08.2015. Notice u/s 142(1) dated 31.03.2016 & 25.05.2016 were issued. The case was received on transfer in pursuance to the order of Pr. CIT-2, Delhi u/s 127 of the Act. Fresh notice u/s 142(1) of the Act was issued on 10.11.2017. Ms. Heena Garg, CA/AR of the assessee company attended the assessment proceedings. Reference to Transfer Pricing Officer (TPO) was made on 14.09.2016 Transfer Pricing Officer. Through order dated 24.10.2017, Ld. TPO proposing adjustment of Rs. 25,88,76,779/- on substantive basis and Rs. 46,11,70,329/- on protective basis. Draft Assessment order dated 19.12.2017 was passed by Ld. AO. Final assessment order dated 30.01.2018 was passed by ld. AO making adjustment of Rs. 25,88,76,779/- on account of TPO order in rel....
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.... test and intensity adjustment. 3. Ld. TPO/ Ld. AO/ Ld. CIT(A) erred in carrying out fresh net margin analysis using Transactional Net Margin Method along with intensity based comparability adjustment based on flawed interpretation of Income Tax Act, 1961 and/or Income Tax Rules, 1962. 4. Ld. TPO/ Ld. AO/ Ld. CIT(A) erred in not appreciating that carrying out intensity based comparability adjustment for the alleged marketing activities undertaken by the Appellant, is mere mirror image of Bright line Test already invalidated by court. 5. Ld. TPO/Ld. AO/Ld. CIT(A) grossly erred in undertaking an opaque analysis for applying bright line test and intensity adjustment and not providing any basis or approach (such as search methodology, keywords used, criterions of selection / rejection of companies, number of companies rejected by way of applying various filters, computation of margins, etc.) for arriving at the list of comparable companies. 6. Ld. TPO/Ld. AO/Ld. CIT(A) grossly erred in considering inappropriate comparables for benchmarking the marketing function of the Appellant. 7. Ld. AO/Ld. CIT(A) erred on facts and circumstances of the c....
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....no statutory mandate. Hence, cannot be upheld. ................... 17. In the result, the appeals of the Revenue are dismissed and the appeals of the assessee are allowed." 7.3 My attention has also been drawn to the Hon'ble ITAT decision in appellant's own case for AY 2012-13 wherein the ITAT held that the AMP expenditure is not an international transaction in the case of assessee and no adjustment to ALP need to be made thereon. The extracts from the ITAT decision dated 26.10.2020 in ITA No. 1970/Del/2017 is reproduced below: "19. On the issue of whether there was any international transaction on AMP, we are guided by the judgment of Hon'ble Jurisdictional High Court in the case of Maruti Suzuki India Ltd Vs CIT (2016) 381 ITR 117 and Bausch & Lomb Eyecare (India) ITA No. 1970/Del/2017 in ITA No. 643/2014 order dated 23.12.2015 (Del.) (HC). 20. The basic purpose of introducing the various provisions of chapter X, was to prevent tax evasion in the transactions undertaken between an Indian entity and its overseas AE. In our opinion, a perceived/notional indirect benefit to the AE, due to incurring of certain expenditure by an....
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....een two or more associated enterprises for the allocation or apportionment of, or any contribution to any cost or expense incurred or to be incurred in connection with a benefit, service or facility provided or to be provided to anyone or more of such enterprises. (2) A transaction entered into by an enterprise with a person other than an associated enterprise shall, for the purposes 'of subsection (1), be deemed to be a transaction entered into between two associated enterprises, if there exists a prior agreement in relation to the relevant transaction between such other person and the associated enterprise, or the terms of the relevant transaction are determined in substance between such other person and the associated enterprise." 56. Thus, under Section 92B(1) an 'international transaction' means- (a) a transaction between two or more AEs, either or both of whom are non resident (b) the transaction is in the nature of purchase, sale or lease of tangible or intangible property or provision of service or lending or borrowing money or any other transaction having a bearing on the profits, incomes or losses of such enterprises, and (c) shall include a mutual ag....