IT/ILT : Where assessee, a distributor of high end audio products manufactured by AE located abroad, incurred certain AMP expenditure for developing marketing intangibles for AE, in order to determine ALP of said AMP expenditure, matter was to be remanded back to TPO to determine same in light of decision in case of BMW India (P.) Ltd. v. Addl. CIT [2014] 146 ITD 165/[2013] 37 taxmann.com 319 (Delhi - Trib.)
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[2014] 49 taxmann.com 24 (Delhi - Trib.)
IN THE ITAT DELHI BENCH 'I'
Bose Corporation India (P.) Ltd.
v.
Assistant Commissioner of Income-tax, Circle-3 (1)*
SMT. DIVA SINGH, JUDICIAL MEMBER
AND T.S. KAPOOR, ACCOUNTANT MEMBER
IT APPEAL NOS. 5178 (DELHI) OF 2011 & 263 (DELHI) OF 2013
[ASSESSMENT YEARS 2007-08 & 2008-09]
JULY 31, 2014
Section 92C of the Income-tax Act, 1961 - Transfer pricing - Computation of arm’s length price (Comparables and adjustments/RPM) - Assessment years 2007-08 and 2008-09 - Assessee-company was a wholly owned subsidiary of 'B' Corporation, USA - It was engaged in business of reselling of
high end audio products manufactured by its AE - Assessee selected Resale Price Method ('RPM') to benchmark its transactions of support services - However, AMP expenses were not benchmarked - In transfer pricing proceedings, TPO opined that AMP expenditure was incurred for developing marketing intangible for AE for which assessee should have obtained some compensation - Based on analysis of certain marketing and advertising companies, TPO determined a mark up of 14.93 per cent activities and, accordingly income of assessee was enhanced on account of AMP expenditure - DRP upheld draft assessment order - Whether in view of fact that assessee was a distributor whose remuneration model was different from a licensed manufacturer, impugned adjustment was to be set aside and, matter was to be remanded back to TPO to examine assessee's claim de novo in light of decision in case of BMW India (P.) Ltd. v. Addl. CIT [2014] 146 ITD 165/[2013] 37 taxmann.com 319 (Delhi-Trib.) - Held, yes [Matter remanded/In favour of assessee]
■■■
[2014] 49 taxmann.com 24 (Delhi - Trib.)
IN THE ITAT DELHI BENCH 'I'
Bose Corporation India (P.) Ltd.
v.
Assistant Commissioner of Income-tax, Circle-3 (1)*
SMT. DIVA SINGH, JUDICIAL MEMBER
AND T.S. KAPOOR, ACCOUNTANT MEMBER
IT APPEAL NOS. 5178 (DELHI) OF 2011 & 263 (DELHI) OF 2013
[ASSESSMENT YEARS 2007-08 & 2008-09]
JULY 31, 2014
Section 92C of the Income-tax Act, 1961 - Transfer pricing - Computation of arm’s length price (Comparables and adjustments/RPM) - Assessment years 2007-08 and 2008-09 - Assessee-company was a wholly owned subsidiary of 'B' Corporation, USA - It was engaged in business of reselling of
high end audio products manufactured by its AE - Assessee selected Resale Price Method ('RPM') to benchmark its transactions of support services - However, AMP expenses were not benchmarked - In transfer pricing proceedings, TPO opined that AMP expenditure was incurred for developing marketing intangible for AE for which assessee should have obtained some compensation - Based on analysis of certain marketing and advertising companies, TPO determined a mark up of 14.93 per cent activities and, accordingly income of assessee was enhanced on account of AMP expenditure - DRP upheld draft assessment order - Whether in view of fact that assessee was a distributor whose remuneration model was different from a licensed manufacturer, impugned adjustment was to be set aside and, matter was to be remanded back to TPO to examine assessee's claim de novo in light of decision in case of BMW India (P.) Ltd. v. Addl. CIT [2014] 146 ITD 165/[2013] 37 taxmann.com 319 (Delhi-Trib.) - Held, yes [Matter remanded/In favour of assessee]
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