Case Law Details
PCIT Vs Amadeus India Pvt. Ltd (Delhi High Court)
Delhi High Court held that Advertisement, Market and business Promotion (AMP) expenses incurred cannot be termed as an international transaction in the absence of any provision for the same in the agreement with Associated Enterprise.
Facts-
During the transfer pricing, the TPO observed that the Assessee has incurred more than normal sales and marketing expenses to build ‘Amadeus’ brand in India, which is legally owned by the AE i.e. M/s Amadeus IT Group SA (‘Amadeus Spain’). The TPO concluded that such higher than normal market expenses i.e. AMP constitute an international transaction between the Assessee and its AE. The TPO computed the adjustment by applying the Bright Line method.
AO issued a draft order dated 29th March, 2014, incorporating the additions made by the TPO. In response to the said draft order, the Assessee filed its objections before the Dispute Resolution Panel (‘DRP’), which were dismissed and the additions made by the AO were upheld. Following the directions of the DRP, the AO passed the final assessment order dated 23rd February, 2015, and made additions which included an addition of transfer pricing adjustment for the AMP expenses at Rs. 81,16,72,668/-. The Assessee aggrieved by the assessment order filed an appeal before the ITAT.
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