Acer India Pvt. Ltd. Vs The Dy. Commissioner of Income-tax (ITAT Bangalore)
Hon’ble Delhi High Court has held in the case of Maruti Suzuki Ltd (supra) that the revenue needs to establish the existence of international transaction before undertaking benchmarking of AMP expenses. In the instant case, we notice that the TPO has entertained the belief on the basis of presumptions that the assessee’s AMP expenses have promoted the brand value of its AE, i.e., no material has been brought on record to show the existence of International transaction. Before us, the Ld A.R placed his reliance on various case laws. We notice that the decision rendered by Delhi bench of ITAT in the case of L.G. Electronics India P Ltd vs. ACIT (ITA No.6253/DEL/2012 dated 14-01-2019) is applicable to the facts of the present case, wherein also identical T.P adjustment had been made.
FULL TEXT OF THE ITAT JUDGEMENT
Both the appeals filed by the assessee are directed against the orders passed by the assessing officer u/s 143(3) r.w.s.144C(13) of the Act in pursuance of directions given by the Ld Dispute Resolution Panel (DRP) and they relate to the assessment years 2012-13 and 2013-14. Both the appeals were heard together and are being disposed of by this order, for the sake of convenience.
2. The assessee company is engaged in the business of manufacture and trading of computer systems and peripherals.
3. We shall first take up the appeal filed for AY 2012-13. The grounds and additional grounds urged by the assessee give rise to following issues:-
(a) Validity of assessment order passed, i.e., according to the assessee, the assessment order is barred by limitation.
(b) Validity of T.P adjustment made in respect of AMP expenses
(c) Addition made u/s 40(a)(i) of the Act.
In the corporate tax grounds urged by the assessee, the assessee has challenged the levy of interest u/s 234B of the Act. At the time of hearing, the Ld A.R agreed that the same is consequential in nature. The ground relating to levy of penalty u/s 271(1)(c) is premature.
4. With regard to the legal issue relating to validity of the assessment order, the Ld A.R submitted that the impugned assessment order has been passed by the AO beyond the time limit prescribed in sec.153 of the Act. We notice that though the assessing officer has passed the assessment order in terms of sec.144C(13) within one month from the end of the month in which the direction from Ld Dispute Resolution Panel was received. However, it is the contention of Ld A.R that the provisions of sec.144C(13) do not extend the time limit prescribed in sec.153 of the Act and in the instant case, the assessment order though was passed within one month from the receipt of direction given by Ld DRP, the same was beyond the time limit prescribed in sec.153 of the Act.
5. We notice that the co-ordinate bench has examined an identical legal issue in the case of M/s Volvo India P Ltd vs. ACIT (IT (TP) A No.1537/Bang/2012 dated 08-05-2019) and has rejected the same with the following observations:-
“3. Before we deal with the grounds of appeal raised by the Assessee, we need to first consider the Assessee’s application dated 22.11.2018 for admission of the following additional ground of appeal because it is a preliminary issue challenging the impugned order as one passed beyond the period of limitation and therefore non est in law:-
“That on the facts and circumstances of the case and in law, the impugned order passed by the assessing officer is barred by limitation and therefore, is liable to be quashed.”
4. The aforesaid additional ground of appeal raises a purely legal issue which does not require any fresh investigation into facts; facts already being on records. The aforesaid additional ground of appeal is therefore admitted for adjudicated on merits in view of the discretion conferred on the Tribunal under Rule 11 of the Income-tax (Appellate Tribunal) Rules, 1963 and the decision of the Hon’ble Supreme Court decision in the case of National Thermal Power Co. Ltd. vs. CIT : [1998] 229 ITR 383 (SC) wherein it was held that any legal ground which can be decided on the basis of facts already available on record should be admitted for adjudication. Further the additional ground seeks to raise purely a question of law viz., that the order passed by the AO is beyond the period of limitation. The aforesaid additional ground is therefore admitted for adjudication.
5. As far as the merits of the additional ground of appeal raised by the Assessee as aforesaid is concerned, the following list of dates are material to adjudicate the aforesaid ground of appeal:
Date Chart
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