Benetton India Private Limited Vs DCIT (ITAT Delhi)
The Delhi Bench of the Income Tax Appellate Tribunal disposed of two appeals filed by Benetton India Private Limited for Assessment Years 2018-19 and 2020-21 against final assessment orders passed under Section 143(3) read with Section 144C(13) of the Income Tax Act, 1961, pursuant to directions of the Dispute Resolution Panel under Section 144C(5). Since the transfer pricing adjustments in both years were similar, the appeals were heard together and disposed of through a common order.
For AY 2018-19, the assessee had raised an additional ground challenging the DRP directions for allegedly being issued without a computer-generated Document Identification Number (DIN), relying on CBDT Circular No.19/2019 dated 14.08.2019. The assessee did not press this additional ground, and the Tribunal dismissed it as not pressed.
On the substantive transfer pricing issue concerning royalty, the assessee submitted that the same issue had repeatedly been decided in its favour in earlier assessment years, with the latest decision concerning AY 2017-18 dated 24.07.2024. The Tribunal noted that the assessee paid royalty to its Associated Enterprise under a trademark and know-how licence agreement and had benchmarked the royalty using the Comparable Uncontrolled Price (CUP) method. The TPO had rejected the CUP approach, applied the Transactional Net Margin Method (TNMM) at entity level and included third-party advertising and marketing expenses while determining the adjustment.
