Indo Nissin Foods Private Limited Vs ACIT (ITAT, Bangalore Bench)
Bright-Line Test Goes Soggy for Top Ramen: ITAT Deletes ₹41.82-Crore AMP Adjustment & Trims Manufacturing TP Addition u/s 92CA
Relevant Facts
In Indo Nissin Foods Pvt. Ltd. v. ACIT, the Bangalore ITAT considered the assessee’s appeal for AY 2020-21 against the final assessment order passed u/s 143(3) r.w.s. 144C(13) & 144B, following DRP directions.
The assessee manufactured & sold instant noodles under brands including Top Ramen, Cup Noodles & Scoopies. It was a subsidiary of Nissin Foods Asia Pte. Ltd., Singapore, & held a non-exclusive licence from Nissin Foods Holding Co. Ltd., Japan, to use trademarks, technical know-how, information & data for producing instant noodles, against payment of royalty.
The assessee returned nil income. Owing to substantial international transactions, the matter was referred to the TPO u/s 92CA(1). The TPO proposed aggregate adjustment of ₹53,34,92,074, comprising ₹11,52,47,234 in the manufacturing segment & ₹41,82,44,840 towards alleged reimbursable AMP expenditure. The DRP rejected the assessee’s objections, leading to the final order dated 26.07.2024.
Issues Before the Tribunal
The principal issues were whether the manufacturing-segment adjustment could be computed on total entity-level revenue instead of being restricted to transactions with associated enterprises; whether six companies selected by the TPO were functionally comparable; & whether AMP expenditure incurred in India constituted a separate international transaction u/s 92B.
