Case Law Details
Olympus Medical Systems India Pvt. Ltd. Vs DCIT (ITAT Delhi)
Conclusion: TPO/AO cannot apply wrong method in the absence of material ie: audited financials of AE. More so, TPO/AO cannot even give the benefit as well to assessee for non cooperation for providing the audited financials of AE.
Held: Assessee company was a wholly owned subsidiary of Olympus Corp and was engaged in import and resale of medical equipments. In addition, assessee was also engaged in installation, repair and maintenance of these equipments in India. Assessee had undertaken Advertisement, Marketing and Promotion of the products of the AE by importing the same. AO held that, there was existence of international transaction of Advertising Marketing and Promotion (‘AMP’) expense and made additions. It was held that the international transaction of AMP functions existed in the case of assessee and the issue was restored to the TPO for following the direction of the Hon’ble Delhi High Court in the case of Sony Ericsson for benchmarking under TNMM in aggregated manner along with the purchase of goods from the AE’s or in the segregated manner, after taking into account appropriate comparables or applying of Resale price method or Cost Plus Method or Profit Split Method keeping in view the findings of the Hon’ble Delhi High Court. Moreover, assessee should be given opportunity of being heard. TPO/AO could not apply wrong method in the absence of material ie: audited financials of AE. On the other hand, TPO/AO could not even give the benefit as well to assessee for non cooperation for providing the audited financials of AE. Further assessee was directed to provide all the relevant documents including the financials of its AE’s if required, failing to which the Authorities could act in accordance with law by invoking the relevant provisions.
FULL TEXT OF THE ORDER OF ITAT DELHI
The present appeal is preferred by the assessee for the Assessment Year 2012-13 against the final assessment order dated 30/04/2021 passed by the DCIT, Circle-3, Gurgaon u/s 143(3) r/w Section 144C of Income tax Act, 1961,( ‘the Act’ for short).
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