Case Law Details
Pernod Ricard India Pvt. Ltd. Vs DCIT (ITAT Delhi)
Conclusion: AMP expenditure of assessee did not have a direct bearing on the promotion of brands of its AEs as the issue stood decided in favour of assessee by the decision of the Tribunal in assessee’s own case for the preceding assessment years i.e., A.Y. 2007-08 and 2008-09.
Held: Assessee was a company engaged in the business of manufacture and trading of Indian made foreign liquor (IMFL). Since assessee had entered into certain international transactions, AO made a reference u/s 92CA(1) to the TPO for determination of the ALP of the international transaction entered into by assessee. According to TPO, the above AMP expenditure had been incurred primarily for building different brands. He noted that the AMP expenditure incurred by the assessee in relation to two segments was substantial in relation to the sales in the two segments. It was submitted by the assessee that it did not own any of the brands which were being sold by it in India except Master Blend and Nine Hills. He observed that brands under which the assessee manufactured IMFL and distributed BIO were all owned by the AEs of assessee. Further, the advertisement campaign of assessee showed that assesseee was promoting the brands in its advertisement and not the actual products. He, therefore, was of the opinion that the AMP expenditure of the assessee had a direct bearing on the promotion of brands of its AEs. He, therefore, issued a show cause notice asking the assessee to explain as to why the AMP expenditure in the distribution segment should not be treated as an international transaction. TPO proposed an upward adjustment of Rs.5,03,33,013/- in the distribution segment. It was held that the issue stood decided in favour of assessee by the decision of the Tribunal in assessee’s own case for the preceding assessment years i.e., A.Y. 2007-08 and 2008-09, therefore, no addition on account of AMP expenditure was warranted.
FULL TEXT OF THE ITAT JUDGEMENT
ITA No.1365/Del/2018 and ITA No.1607/Del/2018 are cross appeals and are directed against the order dated 28th December, 2017 of the CIT(A)-42, New Delhi, relating to A.Y. 2012-13. ITA No.1379/Del/2018 and ITA No. 1608/Del/2018 are cross appeals and are directed against the order dated 29th December, 2017 of the CIT(A)-31, New Delhi for A.Y. 2013-14. ITA No.2366/Del/2019 and 2601/Del/2019 are cross appeals and are directed against the order dated 20th December, 2018 of the CIT(A)-44, New Delhi, relating to A.Y. 2014-15. Since common issues are involved in all these appeals, therefore, these were heard together and are being disposed of by this common order.
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