TaxTMI 
TaxTMI 
2026 (9) TMI 1862
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....r dated 21.05.2026, this Hon'ble Tribunal partly allowed the appeal of the Applicant. However, whilst doing so, certain mistakes apparent on record crept in the order dated 21.05.2026, which are being detailed here as under:- A. GROUND NO. 3 TO 3.7 - TRANSFER PRICING ADJUSTMENT ON ACCOUNT OF ADVERTISEMENT, MARKETING AND PROMOTION ("AMP") EXPENSES 3. At the very outset, it would be imperative to highlight that the issue of AMP expenses is a legacy issue and stands settled in favour of the Applicant by a series of decisions of this Hon'ble Tribunal for the preceding as well as subsequent AYs being AY 2010- 11 to 2015-16, 2020-21 and 2021-22. This Hon'ble Tribunal has in no uncertain terms given a categorical and consistent finding of the AMP expenses incurred by the Applicant not qualifying as an "international transaction". The above principle has also been consistently affirmed by the Coordinate Bench in the recent decision dated 3 June 2026 in the case of Akzo Nobel India Ltd [TS-442- ITAT-2026(Kol)-TP], wherein, under similar factual matrix, the Hon'ble Kolkata Tribunal held that AMP expense does not constitute an international transaction. 4. ....
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....al transaction and applied Bright Une Test to make addition - Tribunal deleted said additions holding that since TPO had not established that there was an international transaction entered into by assessee by incurring a higher AMP expenditure, approach of TPO of determining ALP of such AMP expenditure either on BLT bases or TNMM could not be sustained - High Court by impugned order held that in view of judgments in Sony Ericsson Mobile Communications India (P) Ltd. v. CIT [2015] 55 taxmann.com 240/231 Taxman 113/374 ITR 118 (Delhi) and Maruti Suzuki India Ltd. v. CIT [2015] 64 taxmann.com 150/[2016] 23 7 Taxman 256/381 ITR 117 (Delhi), no substantial question of law arose against order of Tribunal - Whether special leave petition filed against impugned order of High Court was to be granted - Held, yes [Para 12] [In favour of revenue]" 5.5 Since the controversy is not yet settled and the SLPs have been admitted by the Hon'ble Supreme Court in the case of Gillette India Ltd, (supra) and Yakult Danone India (P.) Ltd, (supra), the issue is remanded to the file of the Ld. AO/TPO to reconsider and redecide in light of the final order of the Hon'ble Supreme Court, if any. Apart ....
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.... the Hon'ble Supreme Court passed in the case of PCIT v. Pernod Ricard India Pvt. Ltd., [Order dated 26.05.2026 in SLP(C) Diary No(s). 74598/2025] and CIT v. Whirlpool of India Ltd., [Order dated 20.11.2024 in Petition for Special Leave to Appeal(C) No. 29270/2016], wherein, the special leave petitions on the issue of AMP were dismissed. Copy of the orders passed by the Hon'ble Supreme Court in these cases are annexed herewith as Annexure - 4 and 5, respectively. 8. At this juncture, it would also be relevant to bring to the Hon'ble Tribunal's kind attention that the special leave petition in the case of PCIT v. Yakult Danone India (P.) Ltd. (supra), stands dismissed vide order dated 24.09.2024 on account of the tax effect being below the monetary threshold prescribed by the Central Board of Direct Tax vide Circular No. 09/2024 dated 17.09.2024, for a special leave petition to be maintainable before the Apex Court. Copy of the order dated 24.09.2024 passed by the Hon'ble Supreme Court along with the case status as reflected on the Hon'ble Supreme Court's website is also attached herewith as Annexure 6 (Colly.). 9. That apart, the Hon'ble Tribunal is bound by i....
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....f a special leave petition does not automatically stay the order impugned therein. Hence, the pendency of a special leave petition could never be the sole ground to not follow earlier orders passed by this Hon'ble Tribunal in Applicant's own case. Reliance in this regard is placed on Kunhayammed v. State of Kerala, (2000) 6 SCC 359 (SC).Re: Order Relied upon not Recent - Predates the Decision of the Hon'ble Tribunal rendered in Applicant's Own Case 14. At the cost of repetition, it is reiterated that the order of the Hon'ble Supreme Court, which this Hon'ble Tribunal has labelled as recent dates back to 2018, prior to the first decision in the Applicant's own case for AY 2010-11 and 2011-12, which was passed on 17.06.2020. Further, what would also be relevant to highlight is that the Hon'ble Tribunal whilst giving a categorical finding on AMP not be an international transaction relied on the celebrated decision rendered in the case of Maruti Suzuki India Ltd. v. CIT, [2016] 381ITR 117 (Delhi HC), special leave petition against which was admitted by the Apex Court on 10.03.2017. Hence, despite pendency of the main matter before the Apex Court, this Hon'ble Tribunal took a c....
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....ing back the matter to the file of the TPO, this Hon'ble Tribunal instructed the TPO as under:- c. To ascertain whether the liability towards AMP expenditure was unilaterally incurred by the Applicant or arose out of any agreement; and d. Whether any incidental benefit accrued to the AE. 20. However, whilst giving such a direction, this Hon'ble Tribunal failed to appreciate that the co-ordinate bench in its first order dated 17.06.2020 passed for AY 2010-11 and 2011-12, whilst considering all the material on record and answering the above queries / issues in favour of the Applicant, held as under:- "28. We note that the AMP transaction does not represent the international transaction between the assessee and its AE's as the revenue failed to bring on record any contract or arrangement between assessee and its AE for making AMP expenses for promotion of brand of its AE. In the assessee's case, the assessee company was not under any obligation to incur AMP expenses and also its parent company had no control over such decisions of RBIL. These are routine advertisement expenses. Therefore, in assessee's case the AMP cannot be regarded as inte....
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....ded in favour of the Applicant (since transaction relating to issuance / purchase of shares falls outside the purview of section 92 of the Act). However, whilst holding so, directed the AO to examine whether provisions of section 56(2)(viib) of the Act were applicable on the transaction under consideration. The relevant extract of the decision of this Hon'ble Tribunal is reproduced here-in-below for the ready reference of this Hon'ble Tribunal:- "10.6 We have considered the submissions made. In the decision of the Coordinate Bench in the case of TCG Lifesciences Pvt. Ltd. (supra) and the decision of the Hon'ble Bombay High Court in the case of Vodafone India Services (P.) Ltd. (supra) this issue is decided in favour of the taxpayer. However, the provisions of section 56(2)(viib) of the Act were also brought to the notice of the Ld. AR who referred to section 92 of the Act and stated that any income should be computed having regard with the Arm's Length Price. Since the provisions of section 56(2)(viib) of the Act are applicable for the impugned assessment year, the Ld. AO shall examine the same and decide the issue in accordance with law to whom this issue is hereby re....
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....risdiction of the Hon'ble Tribunal is confined to the subject-matter of appeal, sub-judice before it. Meaning thereby, the Hon'ble Tribunal cannot improve the case of the AO or make out a completely new case which was never thought of by the lower authorities. Reliance in this regard is placed on ITO v. R.L. Rajghoria, [1979] 119 ITR 872 (Calcutta HC) and MCorp Global (P.) Ltd. v. CIT, [2009] 178 Taxman 347 (SC). Re: Inapplicability of Section 56(2)(viib) of the Act 29. At the cost of repetition, it is reiterated that section 56(2)(viib) of the Act (as it existed in the statute book) has no applicability to the facts of the present case. As stated above, this was a case of purchase of shares by the Applicant, however, section 56(2)(viib) of the Act relates to cases of issuance of shares. This is evident from a plain reading of the provisions of section 56(2)(viib) of the Act, which reads as under:- "56 Income from other sources. (2) In particular, and without prejudice to the generality of the provisions of sub-section (1), the following incomes, shall be chargeable to income-tax under the head "Income from other sources", namely:- (viib....
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....ment or reducing a refund or otherwise increasing the liability of the assessee, shall not be made under this sub-section unless the Appellate Tribunal has given notice to the assessee of its intention to do so and has allowed the assessee a reasonable opportunity of being heard: Provided further that any application filed by the assessee in this sub-section on or after the 1st day of October, 1998, shall be accompanied by a fee of fifty rupees." 35. A bare perusal of the above would indicate that the Hon'ble Tribunal within six months from the end of month in which order has been passed may rectify any 'mistake apparent from the record', brought to its notice by the Assessee or the AO. Meaning thereby, if there is a 'mistake' has been crept in the order passed by the Hon'ble Tribunal, which is apparent from the record, the Hon'ble Tribunal may rectify the same within six months from the end of month in which order has been passed. 36. The provisions of section 254(2) of the Act have been a subject matter of interpretation before the Hon'ble Supreme Court and various High Courts of the country, which can be summarised in the following manner: a. ....
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....f the month in which the order was passed, with a view to rectifying any mistake apparent from the record, amend any order passed by it under sub-section (1), and shall make such amendment if the mistake is brought to its notice by the assessee or the Assessing Officer: Provided that an amendment which has the effect of enhancing an assessment or reducing a refund or otherwise increasing the liability of the assessee, shall not be made under this sub-section unless the Appellate Tribunal has given notice to the assessee of its intention to do so and has allowed the assessee a reasonable opportunity of being heard: Provided further that any application filed by the assessee in this sub-section on or after the 1st day of October, 1998, shall be accompanied by a fee of fifty rupees." 3.1 It is to be further examined as to what is a 'mistake apparent from record'. The Ld. AR has relied upon the decision of Saurashtra Kutch Stock Exchange Ltd. (supra) in which the Hon'ble Supreme Court have held as under: "There was no dispute by and between the parties that if there is a 'mistake apparent from the record' and the assessee brings it to the notic....
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....ase, miscellaneous application came to be filed by the assessee under sub-section (2) of section 254 stating therein that a decision of the 'Jurisdictional Court', i.e., the High Court of Gujarat in Hiralal Bhagwati's case (supra ), was not brought to the notice of the Tribunal and, thus, there was a 'mistake apparent from record' which required rectification. [Para 39] The core issue, therefore, is whether non-consideration of a decision of Jurisdictional Court or of the Supreme Court can be said to be a 'mistake apparent from the record'? Both, the Tribunal and the High Court were right in holding that such a mistake can be said to be a 'mistake apparent from the record' which can be rectified under section 254(2). [Para 40] It is also well - settled that a judicial decision acts retrospectively. According to Blackstonian theory, it is not the function of the Court to pronounce a 'new rule' but to maintain and expound the 'old one'. In other words, the Judges do not make law; they only discover or find the correct law. The law has always been the same. If a subsequent decision alters the earlier one, it (the la....
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....ld as under: "■ The court has considered the order passed by the Tribunal allowing the miscellaneous application in exercise of powers under section 254(2) and recalling its earlier order as well as the original order passed by the Tribunal. [Para 3.1] ■ Having gone through both the orders passed by the Tribunal, the court is of the opinion that the order passed by the Tribunal recalling its earlier order is beyond the scope and ambit of the powers under section 254(2). While allowing the application under section 254(2) and recalling its earlier order, it appears that the Tribunal has re-heard the entire appeal on merits as if the Tribunal was deciding the appeal against the order passed by the Commissioner (Appeals). In exercise of powers under section 254(2), the tribunal may amend any order passed by it under sub-section (1) of section 254 with a view to rectifying any mistake apparent from the record only. Therefore, the powers under section 254(2) are akin to order XLVII rule 1 CPC. While considering the application under section 254(2), the Tribunal is not required to re-visit its earlier order and to go into detail on merits. The powers under s....
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....apparent from the record and not beyond that. Even the observations that the merits might have been decided erroneously and the Tribunal had jurisdiction and within its powers it may pass an order recalling its earlier order which is an erroneous order, cannot be accepted. As observed hereinabove, if the order passed by the Tribunal was erroneous on merits, in that case, the remedy available to the assessee was to prefer an appeal before the High Court, which in fact was filed by the assessee before the High Court, but later on the assessee withdrew the same in the instant case. [Para 6] ■ In view of the above and for the reasons stated above, the impugned common judgment and order passed by the High Court as well as the common order passed by the Tribunal recalling its earlier order deserve to be quashed and set aside and are accordingly quashed and set aside. The original orders passed by the Tribunal passed in the respective appeals preferred by the revenue are hereby restored. [Para 7] ■ Considering the fact that the assessee had earlier preferred appeal/s before the High Court challenging the original order passed by the Tribunal, which the assess....
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....R 610 (Gujarat)[02-11-2023] the Hon'ble Gujarat High Court has held that mistake to be rectified has to be apparent from face of record and not one where an extensive delving into arguments and a re-look can be sought on questions decided on merits and has further held that where a detailed order has been passed by Tribunal, no rectification can be made on ground that order passed by Tribunal was erroneous either on facts or in law as in that case only remedy was to prefer an appeal. Further, since in the instant case it was evident on considering decision of Tribunal in appellate proceedings that issues were examined threadbare on merits considering case laws, same could not be a subject matter of rectification merely because, according to revenue, issues had been decided by misinterpretation of facts and law [Paras 13, 13.1 and 13.4]. It is also pertinent to mention that it is not every mistake which can be rectified but only a mistake apparent from record can be rectified. There is a difference between an order being rectifiable and an order being not in accordance with law. While rectification is permissible in the case of the former, an appeal to the higher forum lies in t....
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....iled here as under:- A. GROUND NO. 4 TO 4.6 - TRANSFER PRICING ADJUSTMENT ON ACCOUNT OF ADVERTISEMENT, MARKETING AND PROMOTION ("AMP") EXPENSES 3. At the very outset, it would be imperative to highlight that the issue of AMP expenses is a legacy issue and stands settled in favour of the Applicant by a series of decisions of this Hon'ble Tribunal for the preceding as well as subsequent AYs being AY 2010-11 to 2015¬16, 2020-21 and 2021-22. This Hon'ble Tribunal has in no uncertain terms given a categorical and consistent finding of the AMP expenses incurred by the Applicant not qualifying as an "international transaction". The above principle has also been consistently affirmed by the Coordinate Bench in the recent decision dated 3 June 2026 in the case of Akzo Nobel India Ltd [TS-442-ITAT- 2026(Kol)-TP], wherein, under similar factual matrix, the Hon'ble Kolkata Tribunal held that AMP expense does not constitute an international transaction. 4. However, despite such co-ordinate bench decisions coupled with the undisputed absence of any change in facts, this Hon'ble Tribunal whilst although acknowledging existence of such decisions has held....
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....assessee by incurring a higher AMP expenditure, approach of TPO of determining ALP of such AMP expenditure either on BLT bases or TNMM could not be sustained - High Court by impugned order held that in view of judgments in Sony Ericsson Mobile Communications India (P.) Ltd. v. CIT [2015] 55 taxmann.com 240/231 Taxman 113/374 ITR 118 (Delhi) and Maruti Suzuki India Ltd. v. CIT [2015] 64 taxmann.com 150/[2016] 237 Taxman 256/381 ITR 117 (Delhi), no substantial question of law arose against order of Tribunal - Whether special leave petition filed against impugned order of High Court was to be granted - Held, yes [Para 12] [In favour of revenue]" 5.5 Since the controversy is not yet settled and the SLPs have been admitted by the Hon'ble Supreme Court in the case of Gillette India Ltd. (supra) and Yakult Danone India (P.) Ltd. (supra), the issue is remanded to the file of the Ld. AO/TPO to reconsider and redecide in light of the final order of the Hon'ble Supreme Court, if any. Apart from it, the Ld. AO/TPO is also directed to ascertain whether it was the liability unilaterally incurred by the assessee or arose out of any contractual obligation after examining the agreement wit....
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....11.2024 in Petition for Special Leave to Appeal(C) No. 29270/2016], wherein, the special leave petitions on the issue of AMP were dismissed. Copy of the orders passed by the Hon'ble Supreme Court in these cases are annexed herewith as Annexure - 4 and 5, respectively. 8. At this juncture, it would also be relevant to bring to the Hon'ble Tribunal's kind attention that the special leave petition in the case of PCIT v. Yakult Danone India (P.) Ltd. (supra), stands dismissed vide order dated 24.09.2024 on account of the tax effect being below the monetary threshold prescribed by the Central Board of Direct Tax vide Circular No. 09/2024 dated 17.09.2024, for a special leave petition to be maintainable before the Apex Court. Copy of the order dated 24.09.2024 passed by the Hon'ble Supreme Court along with the case status as reflected on the Hon'ble Supreme Court's website is also attached herewith as Annexure 6 (Colly.). 9. That apart, the Hon'ble Tribunal is bound by its limitations in terms of section 254(1) of the Act, to be confined to the subject matter of the appeal. This boundary has been transgressed given the fact that while the issue was whether there existed....
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....his Hon'ble Tribunal in Applicant's own case. Reliance in this regard is placed on Kunhayammed v. State of Kerala, (2000) 6 SCC 359 (SC). Re: Order Relied upon not Recent - Predates the Decision of the Hon'ble Tribunal rendered in Applicant's Own Case 14. At the cost of repetition, it is reiterated that the order of the Hon'ble Supreme Court, which this Hon'ble Tribunal has labelled as recent dates back to 2018, prior to the first decision in the Applicant's own case for AY 2010-11 and 2011-12, which was passed on 17.06.2020. Further, what would also be relevant to highlight is that the Hon'ble Tribunal whilst giving a categorical finding on AMP not be an international transaction relied on the celebrated decision rendered in the case of Maruti Suzuki India Ltd. v. CIT, [2016] 381 ITR 117 (Delhi HC), special leave petition against which was admitted by the Apex Court on 10.03.2017. Hence, despite pendency of the main matter before the Apex Court, this Hon'ble Tribunal took a conscious decision to deliver a finding in favour of the Applicant and hence, on this count alone, the finding of this Hon'ble Tribunal in the order dated 21.05.2026 is patently incorrect. ....
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....ed by the Applicant or arose out of any agreement; and d. Whether any incidental benefit accrued to the AE. 20. However, whilst giving such a direction, this Hon'ble Tribunal failed to appreciate that the co-ordinate bench in its first order dated 17.06.2020 passed for AY 2010-11 and 2011-12, whilst considering all the material on record and answering the above queries / issues in favour of the Applicant, held as under:- "28. We note that the AMP transaction does not represent the international transaction between the assessee and its AE's as the revenue failed to bring on record any contract or arrangement between assessee and its AE for making AMP expenses for promotion of brand of its AE. In the assessee`s case, the assessee company was not under any obligation to incur AMP expenses and also its parent company had no control over such decisions of RBIL. These are routine advertisement expenses. Therefore, in assessee`s case the AMP cannot be regarded as international transaction as held by the Hon'ble Delhi High Court in the case of Maruti Suzuki India Limited Vs. CIT reported in 381 ITR 117 (supra). Therefore, we allow the appeal of the assessee and d....
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....ne whether provisions of section 56(2)(viib) of the Act were applicable on the transaction under consideration. The relevant extract of the decision of this Hon'ble Tribunal is reproduced here-in-below for the ready reference of this Hon'ble Tribunal:- "10.6 We have considered the submissions made. In the decision of the Coordinate Bench in the case of TCG Lifesciences Pvt. Ltd. (supra) and the decision of the Hon'ble Bombay High Court in the case of Vodafone India Services (P.) Ltd. (supra) this issue is decided in favour of the taxpayer. However, the provisions of section 56(2)(viib) of the Act were also brought to the notice of the Ld. AR who referred to section 92 of the Act and stated that any income should be computed having regard with the Arm's Length Price. Since the provisions of section 56(2)(viib) of the Act are applicable for the impugned assessment year, the Ld. AO shall examine the same and decide the issue in accordance with law to whom this issue is hereby remanded as the law has been changed. Hence, this ground of appeal is partly allowed for statistical purposes." Re: Mistake Apparent from the Record 25. The direction of the Hon....
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....etely new case which was never thought of by the lower authorities. Reliance in this regard is placed on ITO v. R.L. Rajghoria, [1979] 119 ITR 872 (Calcutta HC) and MCorp Global (P.) Ltd. v. CIT, [2009] 178 Taxman 347 (SC). Re: Inapplicability of Section 56(2)(viib) of the Act 29. At the cost of repetition, it is reiterated that section 56(2)(viib) of the Act (as it existed in the statute book) has no applicability to the facts of the present case. As stated above, this was a case of purchase of shares by the Applicant, however, section 56(2)(viib) of the Act relates to cases of issuance of shares. This is evident from a plain reading of the provisions of section 56(2)(viib) of the Act, which reads as under:- "56 Income from other sources. (2) In particular, and without prejudice to the generality of the provisions of sub¬section (1), the following incomes, shall be chargeable to income-tax under the head "Income from other sources", namely :- (viib) where a company, not being a company in which the public are substantially interested, receives, in any previous year, from any person, any consideration for issue of shares that exceeds....
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.... the mistake is brought to its notice by the assessee or the Assessing Officer : Provided that an amendment which has the effect of enhancing an assessment or reducing a refund or otherwise increasing the liability of the assessee, shall not be made under this sub-section unless the Appellate Tribunal has given notice to the assessee of its intention to do so and has allowed the assessee a reasonable opportunity of being heard : Provided further that any application filed by the assessee in this sub-section on or after the 1st day of October, 1998, shall be accompanied by a fee of fifty rupees." 36. A bare perusal of the above would indicate that the Hon'ble Tribunal within six months from the end of month in which order has been passed may rectify any 'mistake apparent from the record', brought to its notice by the Assessee or the AO. Meaning thereby, if there is a 'mistake' has been crept in the order passed by the Hon'ble Tribunal, which is apparent from the record, the Hon'ble Tribunal may rectify the same within six months from the end of month in which order has been passed. 37. The provisions of section 254(2) of the Act have been a subjec....