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| The Tax Publishers2019 TaxPub(DT) 5088 (Del-Trib) : (2019) 201 TTJ 0257 INCOME TAX ACT, 1961
Section 92B
AMP expenditure incurred by assessee in India was mainly for its own benefit to market products manufactured by it in India. Main purpose of incurring of such huge AMP expenses had largely benefitted assessee in India, with an incidental benefit arising to foreign AE, unless TPO could establish direct benefit accruing to foreign AE, it was very difficult to accept existence of international transaction. Further, existence of international transaction had to be established de hors Bright Line Test before undertaking benchmarking of AMP expenses. Accordingly, matter was referred back to TPO for verification afresh.
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Transfer pricing - International transaction - AMP expenses treated as international transaction by applying bright line test (BLT) -
Assessee-company incurred expenditure on advertising, marketing and promotion (AMP) TPO applied bright line test and held the same to be an international transaction for benefit of brand owned by AE abroad.Held: It could not be denied there would be incidental benefit to foreign AE being, AG, which was ultimate parent of assessee, however, AMP expenditure incurred by assessee in India was mainly for its own benefit to market products manufactured by it in India. Main purpose of incurring of such huge AMP expenses had largely benefitted assessee in India, with an incidental benefit arising to foreign AE, unless TPO could establish direct benefit accruing to foreign AE, it was very difficult to accept existence of international transaction. Further, existence of international transaction had to be established de hors Bright Line Test before undertaking benchmarking of AMP expenses. Accordingly, matter was referred back to TPO for verification afresh.
REFERRED :
FAVOUR : Matter remanded.
A.Y. : 2010-11
INCOME TAX ACT, 1961
Section 9(1)(i)
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