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| The Tax Publishers2020 TaxPub(DT) 3573 (Mum-Trib) : (2021) 186 ITD 0010 INCOME TAX ACT, 1961
Section 92B
In the absence of express arrangement/agreement between assessee and AE for incurring AMP expenses to promote brand to AE, AMP expenses incurred by assessee could not be treated as international transactions calling for TP adjustment.
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Transfer pricing - International transaction - AMP expenses -
Assessee claimed deduction of AMP expenses incurred by it. AO treated this as brand building exercise for benefit of brand owned by AE abroad and accordingly an international transaction calling for ALP adjustment.Held: Assessee was not merely a distributor of the products manufactured by its AE but assessee itself was manufacturing its own products in India under license from AE. Further, with a view to market and promote its own manufactured products, the assessee incurred AMP expenditure by making payments to third parties in India. There was no express arrangement/agreement between assessee and AE for incurring such expenditure to promote brand of AE and, therefore, the said transactions did not constitute international transaction relating to AMP expenditure.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2013-14
INCOME TAX ACT, 1961
Section 37(1)
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