The Tax Publishers2020 TaxPub(DT) 0515 (Del-Trib)

INCOME TAX ACT, 1961

Section 92C

Incurrence of AMP expenses was not an international transaction to be benchmarked in the hands of assessee and no TP adjustment had to be made on account of AMP expenses in the hands of assessee, thus, case fell outside the ambit of value addition and once resale was made without any value addition, then in such facts and circumstances, RPM had to be applied as the MAM.

Transfer pricing - Determination of ALP - MAM - RPM v. TNMM--Re-sale of goods imported from AE without any value addition

Assessee re-sold goods imported from its AE. It adopted RPM as the most appropriated method (MAM). TPO took the view that assessee while undertaking activities of distribution had also incurred AMP expenses which resulted in value additions and hence, TNMM had to be applied.Held: Incurrence of AMP expenses was not an international transaction to be benchmarked in the hands of assessee and no TP adjustment had to be made on account of AMP expenses in the hands of assessee, thus, case fell outside the ambit of value addition and once resale was made without any value addition, then in such facts and circumstances, RPM had to be applied as the MAM.

Supported by:Asstt. CIT v. Kobelco Construction Equipment India Ltd. (2017) 81 Taxamnn.com 31 (Del-Trib.) : 2017 TaxPub(DT) 1147 (Del-Trib) and Celio Future Fashion Pvt.Ltd. v. Asstt. CIT [ITA No. 1928/Mum/2016 (Mum.-Trib.) Order, dt. 15-3-2019].

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2012-13


INCOME TAX ACT, 1961

Section 92C

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