INCOME TAX ACT, 1961

Section 92B

Transfer pricing - International transaction - AMP expenses - No understanding or arrangement or 'action in concert' between assessee and AE

Assessee company engaged in manufacturing and distributing various Samsung Products of Consumer Electronics & Home Appliances category claimed deduction of AMP expenses incured by it. TPO treated the same as international transaction as excessive and, in the nature of brand building exercise for benefit of AE abroad and accordingly, TPO suggested ALp adjustment.Held: No understanding or arrangement or 'action in concert' could be inferred from the terms of MDF agreement or the conduct of assessee to show that 'excessive' AMP expenditure had been incurred at the behest of brand-owning AE. Assessee being one of the major players in the Indian market had carried out its AMP activity and function based on its own judgment and commercial realities. Accordingly, so called excessive AMP expenditure could not be treated as international transactions under section 92B.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2013-14

INCOME TAX ACT, 1961

Section 92B

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