Philips India Limited Vs DCIT (ITAT Kolkata)
ITAT Kolkata held that the advertisement, marketing and promotion expenses [AMP Expense] not an international transaction and accordingly, the TP adjustment made by Transfer Pricing Officer/ AO is to be deleted. Accordingly, appeal allowed to that extent.
Facts- The present appeal has been preferred by the assessee. The transfer priding adjustment of ₹54,41,41,000/- on account of provision of software development services is mainly contested. The issue raised in respect of transfer pricing adjustment of ₹94,41,22,563/- towards alleged advertisement, marketing and promotion (AMP) expenses. The issue raised in respect of double disallowance of interest paid to MSMED of ₹55,226/- and double addition of deemed income u/s 41(1) of the Act of ₹70,66,297/-.
Conclusion- Held that the decision of the coordinate Bench in assessee’s own case for A.Y. 2020-21, we direct the ld. AO / Transfer Pricing Officer to exclude these two comparables while working out the average margin of comparable. We also note that after exclusion of these two comparables, the margin of the assessee is 11.88% and is within the permissible of ±3%. Accordingly, the ground is allowed.
Held that the advertisement, marketing and promotion expenses do not an international transaction and accordingly, the TP adjustment made by the ld. Transfer Pricing Officer/ AO is directed to be deleted. The ground is accordingly allowed.
