PCIT Vs Amadeus India Pvt. Ltd (Delhi High Court)
This Revenue appeal u/s 260A challenged the ITAT Delhi order dated 10.01.2025 in ITA No.1656/Del/ 2022, wherein Tribunal had allowed Amadeus India Pvt. Ltd.’s appeal for AY 2018-19. The High Court condoned a brief delay of 18 days in filing & 17 days in re-filing before proceeding to hear the matter.
Issue-1: AMP Expenditure – Transfer Pricing Adjustment
Revenue’s counsel candidly admitted that the issue of Advertising, Marketing & Promotion (AMP) expenses stood covered against Revenue & in favour of Assessee by Delhi HC’s earlier judgment in Amadeus India Pvt. Ltd. (ITA 154/2017, decided on 26.04.2017), which relied on Bausch & Lomb Eyecare (India) Pvt. Ltd. v. Addl. CIT (2016) 381 ITR 227 (Del). The Court noted that even though an SLP against the said judgment is pending before Supreme Court, no stay exists. Hence, Tribunal rightly followed its own earlier year order deleting TP adjustment of AMP expenses, holding that no international transaction existed. Accordingly, no addition, either substantive or protective, could be made.
Issue-2: Disallowance u/s 14A r.w. Rule 8D
The second issue pertained to disallowance u/s 14A, where Tribunal deleted the disallowance holding that:
- No exempt income was earned during the year.
- Investments were made out of own funds & not borrowed funds.
- The issue stood covered by Delhi HC’s earlier rulings.
Revenue’s counsel contended that the 2022 amendment to Section 14A (via Finance Act 2022) made the provision retrospective. However, the Court referred to its landmark ruling in PCIT (Central)-2 v. Era Infrastructure (India) Ltd. [2022:DHC:2690-DB], which held that the amendment is prospective from AY 2022-23 onwards, not retrospective.
