|
The Tax Publishers2019 TaxPub(DT) 1941 (Mum-Trib) INCOME TAX ACT, 1961
Section 92C
ALP analysis in case of distributor would be different from ALP analysis in case of a manufacturer and bright line test (BLT) was therefore, not appropriate method to benchmark AMP expenses incurred by assessee being distributor of products manufactured by AE abroad.
|
Transfer pricing - Determination of ALP Incurrance of AMP expenses by assessee being distributor of products manufactured by AE - Application of bright line test -
Assessee being distributor of products manufactured by its AE abroad incurred advertsing, marketing and promotional (AMP) expenses. TPO holding that AMP expenditure incurred by assessee for the product sold by it in India, resulted in direct benefit to its foreign. AE proceeded to compute ALp adjustment by applying bright line test.Held: ALP analysis in case of distributor would be different from ALP analysis in case of a manufacturer and bright line test (BLT) was therefore, not appropriate method to benchmark AMP transactions in question and, therefore, addition was deleted.
Followed:Sony Ericsson Mobile Communication (India) Pvt. Ltd. v. CIT (2015) 374 ITR 118 (Delhi) : 2015 TaxPub(DT) 1653 (Del-HC) and CIT v. Whirlpool of India Ltd. (2016) 237 Taxman 49 (De) : 2015 TaxPub(DT) 5343 (Del-HC).
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2011-12
INCOME TAX ACT, 1961
Section 92CA
SUBSCRIBE FOR FULL CONTENT |