Case Law Details
Hyundai Motor India Ltd. Vs ACIT (ITAT Chennai)
ITAT Chennai held that transfer pricing adjustment towards brand development services unjustified in absence of contract amongst the assessee and its associated enterprises. Accordingly, AO directed to delete addition made towards brand fee adjustment.
Facts- The matter involved here is that TPO proposed adjustment on account of expenses incurred by the assessee for brand building allegedly incurred for the benefit of its AE. TPO held an opinion that the assessee was manufacturing car under license from Hyundai Korea who was the owner of brand / trade mark / trade name “Hyundai”. The assessee was permitted to use the said brand in terms of ‘Technology and Royalty agreement’ dated 30.09.2002. In terms of said agreement, the assessee had no independent choice or discretion to select or use any brand name of its choice. The assessee manufactured the cars with brand and logo of its AE and spent considerable amount for Advertising, Marketing and Promotion (AMP) expenditure which resulted into increase in brand value of its AE. Accordingly, the assessee was to be compensated for the same as held in earlier assessment years. Accordingly, TPO proposed similar adjustment in this year.
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