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| The Tax Publishers2020 TaxPub(DT) 1492 (Bang-Trib) INCOME TAX ACT, 1961
Section 92B
As evident, economic ownership of brand lied in the hands of assessee and assessee was incurring AMP expenses for the purpose of promotion of such brand and benefit was only received by the Indian entity. Accordingly, assessee could not be expected to seek compensation for the expenditure incurred on asset economically owned by it. Revenue has not shown that there existed any international transaction on account of incurring of AMP expenses. Accordingly, no TP adjustment was called for.
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Transfer pricing - International transaction - AMP expenses - Economic ownership of brand lied in the hands of assessee
Assessee incurred AMP expenses and the same was partially reimbursed by overseas AE of assessee. TPO took the view that assessee had performed value added functions, which would not have been done by a routine trader. Accordingly he took the view that assessee is promoting the brand value of its AE through AMP expenses. Accordingly, by comparing the average AMP expenses incurred by other comparable companies, TPO made ALP adjustment.Held: As evident, economic ownership of brand lied in the hands of assessee and assessee was incurring AMP expenses for the purpose of promotion of such brand and benefit was only received by the Indian entity. Accordingly, assessee could not be expected to seek compensation for the expenditure incurred on asset economically owned by it. Revenue has not shown that there existed any international transaction on account of incurring of AMP expenses. Accordingly, no TP adjustment was called for.
Applied:Sony Ericsson Mobile Communications India (P) Ltd. v. CIT (ITA No. 16/2014, dt. 16-3-2015) : 2015 TaxPub(DT) 1653 (Del-HC)
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2013-14 & 2014-15
INCOME TAX ACT, 1961
Section 92C
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