DCIT Vs Coca-Cola India Private Limited (ITAT Pune)
The Revenue appealed against the order of the CIT(A) for AY 2017-18 challenging the deletion of disallowances relating to advertisement and sales promotion expenses, marketing support charges, service charges, depreciation on coolers, and transfer pricing adjustment on Advertisement, Marketing and Promotion (AMP) expenses, along with certain legal grounds.
The Tribunal noted that the assessee submitted all substantive issues had already been decided in its favour by earlier ITAT orders covering AYs 1997-98 to 2016-17. The Departmental Representative accepted that the issues were covered by those earlier decisions and did not point out any distinguishing facts.
Regarding the disallowance of advertisement and sales promotion expenses under Section 37(1), the CIT(A) had relied on consistent Tribunal decisions in the assessee’s own case. Those decisions recognised a direct nexus between the expenditure and the assessee’s business, held that the assessee was the primary beneficiary, accepted that the expenditure was incurred on grounds of commercial expediency, observed that the economic cost was indirectly recovered from bottlers through concentrate pricing, and held that incidental benefit to bottlers or the parent company did not justify disallowance. The Tribunal found no new facts warranting departure from the earlier decisions and upheld the deletion of the addition.
